Clarin
The U.S. Congress presses for negotiating with the vulture funds
“Concerned” over the path of default, says the document. And reveals that Nahon went to the Capitol to take up the issue
Wednesday, October 30, 2013
By Ana Baron
Washington. Correspondent. Two heavyweights of the U.S. Congress sent a letter to the Argentine ambassador in Washington, Cecilia Nahón, saying that the time has come to negotiate with the vulture funds since “your country is reaching the end of its legal recourses in the U.S. judicial system” and there is “concern that Argentina is choosing the path of default.”
The concern of the chairman of the Subcommittee for the Western Hemisphere and Republican Congressman, Matt Salmon, and the head of the Democratic minority of that committee, Albio Sires, is shared by a great majority of Argentines.
Clarín could confirm that Joshua Rosner, of Graham Fisher & Co., will reveal next month in New York the result of a poll conducted by Sergio Berensztein of Poliarquía: it will say that not only a majority of those who criticize the government, but also those who support it, are in favor of a negotiation by Argentina with the vultures and other creditors like the Paris Club.
More still, a group of retirees and small investors from Belgium, Argentina, Italy and Germany made a recent call for Cristina Kirchner to act in good faith. And to sit down and negotiate with the vulture funds.
“The Argentine government has robbed me of my savings that I invested in good faith,” said Gianfranco Lucifora, an Italian investor, to Reuters. “The country clearly has the capacity to pay the debt of the pensioners like me and simply refuses to do it.”
In the letter, the congressmen accuse Nahon of having said to them on various occasions that it is the holdouts that don’t want to negotiate. But they recall that it was Jay Newman, one of the right hands of NML owner Paul Singer, who wrote an article recently for the Financial Times, presenting a very different outlook. “He says in his article, and we have heard from others that argue the same position, that it is Argentina that is refusing to meet with U.S. holdouts.” The congressmen say that the letter carries the hope of “improving communication between the two countries.”
The congressmen believe that, while they are unaware of the details, the agreement Argentine signed to pay the rulings of the ICSID after arguing that the judgments would have to pass through Argentine courts, could constitute a step to re-establish “Argentina’s credibility and to improve the lives of Argentines.” But if now they refuse to negotiate with the holdouts many think that this was a smokescreen. “From the perspective of Washington, Argentina exhausted the path of no compromise,” says the letter.
In an article published in Forbes magazine, Richard Samp, of the Washington Foundation (sic), argued why the U.S. Supreme Court is unlikely to accept the case of the vultures. Among others he said that one of the issues that will most interest the Supreme Court is whether the ruling from Judge Thomas Griesa – which orders Argentina to pay the vultures 100% of what they are owed – violates the Foreign Sovereign Immunities Act (FSIA).
“A careful examination of this federal law shows that FSIA does not prohibit the compensation granted to the holdouts and no federal court has interpreted FSIA in the way Argentina has interpreted it,” Samp wrote.
Paul Clement, the former U.S. Solicitor General, who has great experience in the U.S. Supreme Court, doesn’t think the same. On the contrary, the government has hired him to advise the team of lawyers that is defending Argentina in this case.
La Nacion
Pressure from the U.S. Congress on the holdouts
Wednesday, October 30, 2013
by Martín Kanenguiser | LA NACION
A subcommittee of the U.S. Congress sent a letter to the government that calls for a solution to the problem of the debt that remains in default, to avoid the problem of low credibility among investors and high inflation.
The missive, sent to the ambassador in Washington, Cecilia Nahon, copying Economy Minister Hernan Lorenzino, indicated that “from Washington’s perspective, Argentina has exhausted the path of no compromise.” It was signed by the chairman of the Western Hemisphere subcommittee of the House of Representatives, Matt Salmon.
Salmon, a conservative Republican who represents the state of Arizona, said that “I sincerely desire that Argentina commits to a negotiated settlement in the near future, since the country is reaching the end” of the case that it has already lost in two levels of the New York courts with the holdouts. Only an appeal by the government to the Supreme Court remains for 2014.
The message, signed jointly with Albio Sires (Democrat), indicate that “there would be great concern that Argentina has chosen the path of default instead of meeting with U.S. creditors, who are not only represented on Wall Street, but also by retirees from public services, like teachers.”
Salmon, who mentioned his recent trip to Buenos Aires, where he met with officials and members of the opposition, recalled that he held “various meetings with the ambassador” who opted for no comment on the matter when asked by LA NACION. There, according to the legislators, Nahon emphasized the intransigence of the holdouts on cooperating with the exit from the default, but at the same time the manager of the vulture fund NML-Elliott, Jay Newman, “painted a very different picture” in an article in the Financial Times, in which he relayed his meetings with Argentine officials in recent years.
Also, they emphasized that the possible agreement over the sentences in the ICSID could “be a step towards re-establishing the country’s credibility,” in a context in which “the citizens and businessmen of Argentina can deal with the lack of access to capital, vital for the growth of the economy.”
El Cronista
In two months, negotiations between the bondholders and the holdouts begin for lifting the lawsuits
The investment fund seeks to convince all the holders of Argentine debt to give up 20% of interest to those who have claims to avoid default
Wednesday, October 30, 2013
The private negotiation being brought forward by a group of creditors led by the investment fund Gramercy for trying to convince the vulture funds to drop their lawsuits will begin in two months, said a source linked to the operation. The bondholders intend to give up part of the money owed them on interest from their restructured bonds to the holdouts to make the Argentine government’s swap reopening offer more juicy.
That is the time it will take Gramercy to put together the Argentine debt holding funds to coordinate the joint strategy, said the informant. Then, a negotiating committee will be formed to try to convince the holdouts.
The operation consists of the bondholders giving up 20% of the interest in the coming give years for making up a kind of common fund to pay those who didn’t enter the swaps. The fund could satisfy holders of bonds in default for some US$6 billion, which could perceive up to US$17 billion if the ruling in favor of NML Capital is repeated.
The logic is that this way, a default would be avoided and bonds will increase in value, by which the holders will gain more than they gave up to the vulture funds.
The government is aware of the operation and gave Gramercy a free path, while the negotiations are presented as eventual agreements between private parties.
That offer would have a real value of US$1 billion, to split among all the holdouts. And it would be added to the offer of the swap, 60 cents for every dollar in default. The offer, however, would be far from what the U.S. courts ruled should be collected by the group of litigants led by NML Capital, of Paul Singer, and which comes to US$1.5 billion between principal and interest.
Gramercy seeks to gather all the bondholders for them to cede part of their future collections. At a minimum, they must reach 85% of the holders of restructured debt. “If they are not all there, it doesn’t go forward,” said one of the negotiators.
But an important bondholder is opposed and could block the operation. It is Mexican David Martinez, of Fintech. Martinez, owner of 40% of Cablevision, is suing Singer and is not ready to negotiate with the American. While there are contacts between Gramercy and Fintech to come together on positions, the Mexican “is not entering”, said a source familiar with the operation.
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