Ambito Financiero: “The reopening of the swap will not have a closing date” by: Carlos Burgueño The official intention is that it be in operation before the October elections

Lead Articles:

 

Ambito Financiero: “The reopening of the swap will not have a closing date” by: Carlos Burgueño

The official intention is that it be in operation before the October elections  

 

Clarin: “The vultures threaten lawsuits against bondholders that accept the new swap”  by Ana Baron

They say the Argentine proposal violates U.S. law.  The other holders also put forth doubts.  

 

La Nacion: “Investors believe that the change of payment location for debt bonds will fail” by Martín Kanenguiser

 

La Nacion: “Wall Street doubts the feasibility of the Argentine proposal” by Florencia Donovan 

The question is if the country is disobeying the U.S. judiciary with the offer  

 

La Nacion: “Doubts in U.S. over new offer” by Silvia Pisani 

Analysts criticize the idea of evading that country’s courts with a change of jurisdiction

 

El Cronista: “Risk for the swap: the government had committed to abide by U.S. rulings” ESTEBAN RAFELE Buenos Aires

Francisco Eggers, Economy official, signed a brief in which he guaranteed that the country would not take measure to evade a sentence against it

 

El Cronista: “Change of jurisdiction: While there is interest, investors fear that the swap will turn into a technical default in September”VERONICA DALTO Buenos Aires

If the Court lifts the stay that suspends payment to the vultures, the country could enter into technical default on September 30, the next New York law maturity date. The swap to local law will run a risk  or will generate a heavy loss for holders of bonds under foreign law

 

El Cronista: “On Wall Street, they see the swap as a risky plan with inopportune timing” MARÍA ELENA CANDIA Buenos Aires

They warn that the risk the Court of Appeals will lift the stay that suspended the order to pay has risen significantly after the announcement of a swap of bonds to local law.  They believe that only a minority group of creditors might enter the reopening of the exchange.

 

El Cronista: “We are debating what to do with the change of jurisdiction”” LAURA GARCÍA Buenos Aires

Says that international law is generally preferred.  “I’d expected this but after a final ruling, unless they already see it as lost,” he acknowledges   

 

El Cronista: “Cristina’s counter-attack and a provocation that speeds up the timing”

 

El Cronista: “A decade of financial isolation of Argentina” Jorge Todesca, Economist. Director of Finsoport Economic Consultants

 

Clarin: “For Lavagna, it’s “unlikely’ that the plan will reach high acceptance”

The reopening of the swap, he said, unveils the “permanent improvision”.  There is a lack, he added, of an integral change of policies.

 

Ambito Financiero: “With a new swap they believe that adhesion will reach 95%” By: Pablo Wende

Predictable: Only bonds with local law will be delivered.  There are doubts over the change of legislation of bonds

 

Other Debt Digest:

 

La Nacion: “Senate begins debate on swap today”

Lorenzino and Kicillof to testify in Senate committee at 11am local time on bill to reopen the debt swap for the holdouts to enter.  The text has not yet been seen.  It does not appear that it will include language about change of jurisdiction for existing exchange bonds.  Because of the “delay from the Executive” there is “uncertainty still” about “how the change in jurisdiction of restructured bonds will be resolved.  There was speculation that the bill will come in through the House of Deputies.”

 

Ambito Financiero: “Express process today in Senate isn’t enough to dispel doubts”

Senate to hold hearing on reopening of the swap today with Lorenzino and Kicillof testifying.  The bill has not yet been seen by any senators, but a floor vote has been scheduled for September 4, then it will go to the House “where the situation could be a bit more complex.”  “More comlex is the future of the decision to offer a change of jurisdiction, New York to Buenos Aires, in case the situation is definitively complicated by the U.S. Supreme Court, announced by the President.  That decision, which will also require a law, fell into cloudiness now.”

 

Ambito Financiero: “Opposition is not all in agreement”

Center left opposition members of the House are divided on the reopening of the swap.  The UCR leader Ricardo Gil Lavedra said his block will back the bill to “defend the national interest” and that a new default would be “something extremely grave for the country.”  But CC member Alfonso Prat-Gay opposes it, saying it means “an acknowledgement that the government is trapped in its own mistakes” and opposes reopening the swap just as he opposed it in 2010, seeing it as an “unacceptable gift” to creditors. 

 

Ambito Financiero: “Without restrictions for transfers”

Alejandro Vanoli, president of the CNV, tells AF that “there are no currency exchange restrictions” on holders of Argentine bonds and so there are no impediments for moving payments, received in hard currency from the Caja de Valores, abroad.  “With the current rule framework, investors carry dollars abroad, which are paid through the Caja de Valores, from bonds issued by the Republic.”  And investor can move their received interest or principal payments abroad, or transfer their bonds to Euroclear or Eurostream, Vanoli points out.  He said statements by some that there were any restrictions were from “ignorance or bad faith.”

 

Clarin: “After the default, public debt grew by US$100 billion”

Between 2001 and 2012, Argentina’s public debt went from US$144.212 billion to US$197.464 billion, according to Economy Ministry data.  If unrestructured debt with bondholders and the Paris Club is added, the figure rises to US$240 billion, or 50% of GDP.  Almost half of the 197bi is in the hands of public entities.

 

 

OTHER NEWS ITEMS:

·         AF and El Cronista report that risk ratings agencies are awaiting details on the Argentine debt proposals before taking action.  Moody’s and S&P warn that it is likely that the proposal will mean losses for bondholders. 

·         Argentine market assets reacted sharply to Cristina’s Monday announcement.  The Merval fell, along with bonds with Argentine law, while NY bonds rose.  The “blue” dollar rate jumped to 9.50 pesos.  AF reports that Argentine CDS prices rose 13%.

·         The big news yesterday was Cristina’s announcement that all salaried workers who make 15,000 pesos or less per month will now be exempt from paying income tax.  She said the move was to stimulate consumption.  There is also speculation that she will announce a rise in per-child welfare payments.