Debt: expect a ruling in favor of the vultures in New York

8 MAR 2013 8:39 pm

ARGUE THAT CONFORM NO PAYMENT OFFER THE JUDGES

Debt: expect a ruling in favor of the vultures in New York

Says the Institute of International Finance said in a report on capital markets.

By ANA BARON

Washington. Correspondent

abaron@clarin.com

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Debate. An illustration of the Feb. 27 hearing in the Court of Appeals of New York.

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In its latest report on the "Capital Market", the Institute of International Finance, the powerful partnership that brings together the world's largest banks, was pessimistic about the possibility that the Court of Appeals of New York rule in favor of Argentina in its dispute with the vulture funds.

In the section devoted to analyzing the hearing held on February 27 and Argentina received the order to submit a payment made ​​to the vulture funds, the IIF says: "The impression left (the audience and order) is that the outlook for the resolution of the lawsuit filed by the holdouts is negative for Argentina. "

For the IIF, even the arguments presented by the Bank of New York Mellon, and bondholders restructured, the two main allies in Argentina, convinced the judges: "The judges expressed little sympathy for the concerns expressed by the BNYM bondholders and restructured on the impact that the judge's ruling November Griesa would affect their interests, the efficiency of the payment system and future debt restructurings. "

Speaking to Clarin , Hung Tran, deputy director of the IIF are cautious , warning that had to wait for the court ruling. "We need to see exactly what the text says," he said when this correspondent asked about the impact it could have an adverse decision by Bank of New York on the payment chain.

Anyway, on a report from Credit Suisse and press comments, IIF assessment indicates that more and more observers are pessimistic about Argentina. Indeed, in an article published yesterday in Forbes magazine, Hal Singer also believes that judges are going to give the reason for the vulture funds . "The Court of Appeals appears ready to grant the holdouts total victory," says Singer.

The specialist for Reuters Felix Simon agrees. In its latest analysis of the Feb. 27 hearing and the order that Argentina received after submitting a payment formula, Simon says that if Argentina offers an exchange under the same conditions as was done in 2010, or at a discount of 70%, the Court will not accept it . Simon says it is necessary to note that the order specifies that the Argentine government has to specify "how and when" pay the original bonds that are in default for 11 years. "The order (...) helps explain the reasoning by which the Court will end up pushingArgentina to a default, "says Simon. He adds: "Obviously, this does not mean that Elliot will charge but it does mean that the fund can transform Argentina into a global economic pariah , at least until you can collect. "

In the end, Simon softens its position: "While the current situation is very bad for Argentina, can also be equally bad for the Southern District and New York's status as an international financial capital. That is why the Court will have to think very strongly before submitting a bug draconian ".