Lead Articles:
El Cronista: “Vulture funds denounce pact”
El Cronista: “Warning that holdout ruling in New York could create conflict with European courts”
Holders of bonds with English legislation asked to be exempt from an eventual adverse ruling in the U.S. which orders the Bank of New York to block payments
Ambito Financiero: “Signal from Belgian court to European bondholders”
La Nacion: “Another Brazilian company with problems in Argentina”
The government rescinds contract with ALL, which transported more than 5 million tons of cargo in the country per year; threat of lawsuit against the State
El Cronista: “Vale, Petrobras, ALL, Dilma is tired of the Argentines”
El Cronista
Vulture funds denounce pact
Wednesday, June 05, 2013
The vulture funds yesterday took advantage of the controversy around the memorandum signed with Iran to smack Argentina. This time, they published an ad in the Washington Post, Politico, Roll Call and other U.S. media denouncing the pact between both countries under the title “Shameful Allies”. The ad shows the dace of President Cristina Kirchner and Iranian leader Mahmoud Ahmadinejad. “The time has come to stop Argentina from continuing to break U.S. and international law,” says the text. The ad was financed by ATFA, the group that is lobbying in Washington in the name of NML, Paul Singer’s fund, and other groups affected by the different policies of the President.
El Cronista
Warning that the holdout ruling in New York could create a conflict with European courts
Holders of bonds with English legislation ask to be exempt from an eventual adverse ruling in the U.S. that orders the Bank of New York to block payments
Wednesday, June 05, 2013
MARIANA SHAALO Buenos Aires
The creditors of Argentine bonds in euros emitted after the debt swaps of 2005 and 2010 warned yesterday in the Court of Appeals in New York that the confirmation of the ruling of lower court Judge Thomas Griesa that orders the blocking of payments of restructured warrants could raise a dispute with European courts.
The Commercial Court of Brussels accepted holding a hearing on June 25 to hear creditors of Argentine debt in euros emitted under English legislation that seek to have the Court of Appeals of New York overturn Griesa’s ruling that could complicate their payments. The case by which the court must take part is called Knighthead Capital Management, LLC et al. v. Bank of New York S.A., et al.
The creditors of Argentine bonds in euros – called Euro Bondholders- notified the American court that they asked the Brussels court to make it clear that Bank of New York, Euroclear and Euroclear Bank will have to help Argentina pay bonds emitted in euros under English legislation instead of blocking payments.
“We respectfully ask the court to find the ruing inapplicable for foreign entities or at a minimum not rule with respect to the Belgian plaintiffs that are still awaiting a ruling in the court of their country. By keeping the measure applicable to Belgian entities, the court could contravene the definitive interpretation of a Belgian court,” they said in the document sent to the Court of Appeals in New York.
To pay the coupons on warrants in euros, Argentina makes deposits in the Bank of New York Mellon and then the entity transfers them to an account in Germany at Deutsche Bank. From there the funds are distributed to clearing houses, including Euroclear, which by its own account already asked that the court reverse Griesa’s ruling because it goes against Belgian law.
In this framework, for the first time in six years, investors are preferring Argentine bonds in euros instead of those denominated in dollars with New York law since they are speculating that they will be protected against an adverse ruling. Since they were emitted in the restructuring of debt in 2005, the yield on Discount bonds in euros (DICE) was an average of 1.26% above the same bond in dollars with New York legislation, while yesterday it was 0.74% lower.
“Some investors, in particular distressed funds, are preferring the euro bonds to dollars with New York law, but what is being seen is a change in profile of investor from each bond, and a rebalancing of those with UK law, evaluating a greater risk for NY law warrants,” explained Alejo Costa, Fixed Rate analyst for Puente, about the trend that began months ago. “The spreads regarding the respective rates of risk on euro bonds moved to being below those with NY law since March 2013, when before they’d remained higher,” Costa pointed out.
The DICE which matured in 2033 yields 14.67%, which puts it below the Discount in dollars with New York legislation (DICY) which yesterday offered a yield of 15.41%.
“If the petition is accepted there will be a dispute between the American and European courts, with Bank of New York as a hostage in the measure of the European courts rejecting the measure and ordering Bank of New York to continue paying the bonds in euros,” said attorney Eugenio Bruno, of the Garrido Firm.
Ambito Financiero
Signal from Belgian court to European bondholders
Wednesday, June 05, 2013
The European bondholders that entered the debt swaps and were admitted by the U.S. Court of Appeals in the lawsuit that Argentina faces against the vulture funds, informed that court yesterday that they’d gotten a nod from the court of Belgium to impede an eventual blocking of payments to European investors.
In a letter sent to Catherine O'Hagan Wolfe, secretary to the Court of Appeals, the firm representing the creditors, Latham & Watkins, let it be known that the court accepted a request for an expedited decision, which will take place on June 25, to stop a move on funds belonging to European creditors, if the ruling of Judge Thomas Griesa succeeds in the United States. This way, on the 25th the Commercial Court of Brussels will have to rule on a suit by European bondholders against Bank of New York Mellon Brussels, Euroclear and Euroclear Bank, which seek that said court oblige these entities, all of them Belgian, to honor their obligations in the process of paying bonds emitted by Argentina in the swaps of 2005 and 2010, denominated in euros. The holders seek to ensure the payment of service on the bonds and avoid having a court decision in the United States impede the normal process of movement toward Belgium, and though Belgian entities. In particular, in the filing that this group of European bondholders made in New York and that they reiterated in the brief yesterday, they ask the Court of Appeals to, at the time of ruling on the application of the order of pari passu (equal treatment), they abstain from applying an order that reaches entities that are not found under their jurisdiction, like the branch of Bank of New York in Brussels and Euroclear, both agents that participate in the payment process for Argentine bonds denominated in euros
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