'We don't need int'l lenders,' Lorenzino announces bond payment

Economy Minister Hernán Lorenzino announced Argentina will be making payments for more than $3.5 billion dollars in GDP-linked bonds, at the Economy Ministry.

Lorenzino presented the payment as a triumph against the hedge-funds.

“Vulture funds couldn’t make us enter a technical debt-default as they wanted. And here is the proof that we do not need from international lenders to pay are debts.”

Though Argentina is officially transferring the funds today, investors will be paid next Monday.

The payment of GDP linked bonds, a coupon that was offered to the bondholders who entered the debt-swap offers of 2005 and 2010, was uncertain after US judge Thomas Griesa ruled in November that Argentina had to pay the hold-out bondholders who had not entered the debt-swaps. He threatened to order the seizure of funds which Argentina planned to deposit in New York Mellon bank to pay these bondholders.

The GDP-linked bonds were originally created by former Economy Minister Roberto Lavagna in 2005, in order to entice investors to enter the debt-swap offers because the payments would be tied to the growth of the Argentine economy (which had been experiencing over 5 percent growth rates at that time).

After recent reports that Argentina grew more than 3.26 percent in 2011, a payment will be made this year. If Argentina does not grow more than that percentage for the 2012 and 2013 fiscal years, it will not have to make payments for that specific bond in 2013 and 2014.