Alas, we must slog through another month to find out how it ends. The NML v. Argentina argument in the Second Circuit was postponed at the eleventh hour. In other news, one of the panel members recused himself, also at the eleventh hour. And Professor Ronald Mann joined the amicus party on the NML side on a narrow U.S. payments point.
Sonntag, 15. Juli 2012
Freitag, 13. Juli 2012
Griesa applied the pari passu clause to accept this complaint, which finds that the balances that the holdouts claim have the same rights and obligations as other creditors, despite their acceptance of the terms dictated by the government in the 2005 and 2010 swaps, while the litigants did not.
La Nacion
Concern over debt case
Friday, July 13, 2012
By Martin Kanenguiser
The government is waiting with concern for the next step in the case that the vulture funds won in the first round and which could cause a virtual rupture with the bondholders that accepted the two swaps to exit the default.
If it is not postponed, on Wednesday the 18th a hearing before the Court of Appeals in New York will listen to the arguments of Argentina, the bondholders and the U.S. government around this case related to the pari passu clause.
In the lower court decision, Judge Thomas Griesa ruled against the government and official sources acknowledged to LA NACION that it “is very complicated” to anticipate a favorable final decision.
"When a case gets to this level, it’s a Pandora’s box,” explained a qualified official source, worried over the news sent by the law firm that represents Argentina in New York, Cleary, Gottlieb, Steen & Hamilton.
An attorney connected to the case told LA NACION that “the chances are 50% for the government and 50% for the bondholders.”
Finance Secretary Adrián Cosentino admitted some time ago that “it’s a long process, because the Appeals Court is taking a long time and then there is another round.”
If Griesa’s decision is upheld, as his latest rulings have reflected his exhaustion over the lack of resolution of the conflict between Argentina and its creditors after more than 10 years of judicial sparring, the government couldn’t pay the bondholders that accepted the swaps without facing attachments.
This is because the funds Dart and Elliott managed to get Griesa to back the idea that they should collect just like the rest of the creditors and, as such, if the Appeals Court upholders the decision, the government will have to proportionally pay them part of what they pay the rest in each maturity payment. The judge also blamed the banks that participated in the swap and who distribute the dollars from Argentina in the United States, so the fear of an unfavorable outcome is not only coming from the government.
Griesa applied the pari passu clause to accept this complaint, which finds that the balances that the holdouts claim have the same rights and obligations as other creditors, despite their acceptance of the terms dictated by the government in the 2005 and 2010 swaps, while the litigants did not.
The official source said that “there is much jurisprudence that backs what the government of the United States said” in a brief filed in favor of Argentina, not only for this case but in order to avoid having the vulture funds boycott other sovereign restructuring operations. In its brief to the court, using an amicus curiae, the government of Barack Obama admitted “an almost universal consternation by the financial markets” from the decision to apply the pari passu clause.
At the Palacio de Hacienda they breathed a sigh of relief for this brief, but the bondholders have also gotten strong support from various American lobbies who have key influence in an election year.
Ambassador Jorge Argüello launched a complex strategy to confront this pressure on American public opinion. But among the officials at the departments of Treasury and State, a strong skepticism prevails over the lack of agreement with Argentina on other debts, like that with the Paris Club and the favorable decisions for companies of that country in the arbitration tribunals of the World Bank.
If the appeals court upholds the vulture funds’ claims, according to attorneys that participated in the swap, Argentina will not be able to pay service on the debt coming out of either swap if it doesn’t also pay the more rebellious bondholders.
Thus, they said, the government will have to pay out the bonds at the Caja de Valores in Buenos Aires in order to avoid any possibility of attachments, with the consequent harm for creditors that began to collect in 2005 and 2010, respectively. “An unfavorable decision will bring us to having to be very
Thus, they said, the government will have to pay out the bonds at the Caja de Valores in Buenos Aires in order to avoid any possibility of attachments, with the consequent harm for creditors that began to collect in 2005 and 2010, respectively. “An unfavorable decision will bring us to having to be very careful in paying service on the debt,” said the source.
The official said that “to uphold a decision like that would complicate all the restructuring processes in course or that could take place in Europe in the future, in a scenario in which one needs calm.” The case moves forward while international investors have come through the Palacio de Hacienda this week to see if Argentina is going back to the markets. The response was sharp: “The President doesn’t want to.”
Donnerstag, 12. Juli 2012
"Payments are guaranteed to be made properly, on time and in line with usual procedures," provincial Economy Minister Silvina Batakis told Reuters.
BUENOS AIRES, July 11 (Reuters) - Argentina's largest province will pay its
debts as usual this year despite tight finances that have prompted
belt-tightening measures and delayed a bonus for public workers, a provincial
official said on Wednesday.
"Payments are guaranteed to be made properly, on time and in line with usual procedures," provincial Economy Minister Silvina Batakis told Reuters.
The financing crunch in Buenos Aires province, which accounts for more than a third of Argentina's gross domestic product, has raised concerns about its ability to pay its debt, pushing yields up to near-record levels.
The province faces debt obligations of about $395 million on dollar- and euro-denominated bonds during the rest of the year, according to data released in December.
Buenos Aires' dollar-denominated euro bond due in 2015 yielded 26.6 percent on Wednesday, almost 1.1 percent over this year's lows, reached in early May, according to Reuters data. Higher yields reflect the perception of increased risk of default.
Center-left President Cristina Fernandez has only partially heeded to appeals for financial aid from provincial Governor Daniel Scioli, a former ally of the president and possible 2015 presidential candidate.
Like Fernandez, Scioli is a member of the fragmented Peronist movement that has dominated Argentine politics for 70 years, but he is favored by Wall Street investors and disliked by her allies who view him as too far to the right.
Argentina's constitution limits presidents to two consecutive terms, meaning Fernandez could run again only if she sought to amend it. Scioli has said he would like to stand if she did not seek a third term.
Fernandez has suggested the shortfall in Buenos Aires was due to Scioli's "mismanagement," though many other provinces are also facing spiraling deficits.
The province of Cordoba, which is also struggling to pay wages and pensions on time, said this week it would offer up to $50 million in a one-year dollar-denominated bond.
"Payments are guaranteed to be made properly, on time and in line with usual procedures," provincial Economy Minister Silvina Batakis told Reuters.
The financing crunch in Buenos Aires province, which accounts for more than a third of Argentina's gross domestic product, has raised concerns about its ability to pay its debt, pushing yields up to near-record levels.
The province faces debt obligations of about $395 million on dollar- and euro-denominated bonds during the rest of the year, according to data released in December.
Buenos Aires' dollar-denominated euro bond due in 2015 yielded 26.6 percent on Wednesday, almost 1.1 percent over this year's lows, reached in early May, according to Reuters data. Higher yields reflect the perception of increased risk of default.
Center-left President Cristina Fernandez has only partially heeded to appeals for financial aid from provincial Governor Daniel Scioli, a former ally of the president and possible 2015 presidential candidate.
Like Fernandez, Scioli is a member of the fragmented Peronist movement that has dominated Argentine politics for 70 years, but he is favored by Wall Street investors and disliked by her allies who view him as too far to the right.
Argentina's constitution limits presidents to two consecutive terms, meaning Fernandez could run again only if she sought to amend it. Scioli has said he would like to stand if she did not seek a third term.
Fernandez has suggested the shortfall in Buenos Aires was due to Scioli's "mismanagement," though many other provinces are also facing spiraling deficits.
The province of Cordoba, which is also struggling to pay wages and pensions on time, said this week it would offer up to $50 million in a one-year dollar-denominated bond.
Mittwoch, 11. Juli 2012
Interview with the Economy Minister of the Province of Buenos Aires, Silvina Batakis
| Source: Ámbito Financiero | July 3, 2012 | |
Interview with the Economy Minister of the Province of Buenos Aires, Silvina Batakis | |
For the Minister of Economy, the Central Government understands the effort made by the Province of Buenos Aires and since the beginning of the year the central government is committed to aiding the Province of Buenos Aires.
| |
3 PBA Bondsmit Kurs und Prospekt
|
Datum: Heute,
11:23
| |||
Zitat:
WKN A1GLW5 / ISIN XS0584493349 PBA 11/19-21 ... Prospekt ... 1/3-Tilgung am 26.01.2019/20/21 WKN A0NTDE / ISIN XS0290125391 PBA 07/26-28 ... Prospekt ... 1/3-Tilgung am 18.04.2026/27/28 -------------------
|
Samstag, 7. Juli 2012
PBA USD Bonduniversum
9.25 Prov Buenos 17 (XTR) - 15.04.2017
Price: 74.625 USD
Chg. (in%): ±0 USD (±0.00% )
Volume: -
9 1/4 % Discount Global Notes:Provincia de Buenos Aires:2006-15.4.17 REG-S (UNSUBORDINATED)
XS0234087590
9.375 Prov 18 Reg-S (XTR) - 14.09.2018 Price: 58.19 USD Chg. (in%):±0 USD (±0.00% )
Volume: -
9 3/8 % Notes:Provincia de Buenos Aires:2006-14.9.18 Reg-S (UNSECURED)
XS0270992380
9.625 Prov.Buen 28 (XTR) - 18.04.2028 Price: 52.44 USD Chg. (in%):±0 USD (±0.00% )
Volume: -
9 5/8 % Notes:Provincia de Buenos Aires:2007-18.4.28 Reg-S
XS0290125391
11.75 Pr Buenos 15 (XTR) - 05.10.2015 Price: 70.875 USD Chg. (in%):±0 USD (±0.00% )
Volume: -
11 3/4 % Regd.Notes:Province of Buenos Aires:2010-5.10.15 Reg-S Kindersperre 100.000 $
10.875 Pr Buenos 21 (XTR) - 26.01.2021 Price: 59 USD Chg. (in%):+1.63 USD (+2.83% )
Volume: -
10 7/8 % Regd.Notes:Province of Buenos Aires:2011-26.1.21 Reg-S Kindersperre 100.000 $
11.75 Pr Buenos 15 (XTR) - 05.10.2015 Price: 98.81 USD Chg. (in%):+0.14 USD (+0.14% )
Volume: -
11 3/4 % Regd.Notes:Province of Buenos Aires:2011-5.10.15 Reg-S Tranche 2
XS0650872947
----------------------
8.5 Prov 17 Reg-S (XTR) - 15.04.2017 Price: 79 EUR Chg. (in%):±0 EUR (±0.00% )
Volume: -
8 1/2 % Regd.Discount Global Notes:Provincia de Buenos Aires:2006-15.4.17 Reg-S (UNSUBORDINATED)
XS0234088994
9 1/4 % Discount Global Notes:Provincia de Buenos Aires:2006-15.4.17 REG-S (UNSUBORDINATED)
XS0234087590
9.375 Prov 18 Reg-S (XTR) - 14.09.2018 Price: 58.19 USD Chg. (in%):
9 3/8 % Notes:Provincia de Buenos Aires:2006-14.9.18 Reg-S (UNSECURED)
XS0270992380
9.625 Prov.Buen 28 (XTR) - 18.04.2028 Price: 52.44 USD Chg. (in%):
9 5/8 % Notes:Provincia de Buenos Aires:2007-18.4.28 Reg-S
XS0290125391
11.75 Pr Buenos 15 (XTR) - 05.10.2015 Price: 70.875 USD Chg. (in%):
11 3/4 % Regd.Notes:Province of Buenos Aires:2010-5.10.15 Reg-S Kindersperre 100.000 $
XS0546539486
10.875 Pr Buenos 21 (XTR) - 26.01.2021 Price: 59 USD Chg. (in%):
10 7/8 % Regd.Notes:Province of Buenos Aires:2011-26.1.21 Reg-S Kindersperre 100.000 $
XS0584493349
11.75 Pr Buenos 15 (XTR) - 05.10.2015 Price: 98.81 USD Chg. (in%):
11 3/4 % Regd.Notes:Province of Buenos Aires:2011-5.10.15 Reg-S Tranche 2
XS0650872947
----------------------
8.5 Prov 17 Reg-S (XTR) - 15.04.2017 Price: 79 EUR Chg. (in%):
8 1/2 % Regd.Discount Global Notes:Provincia de Buenos Aires:2006-15.4.17 Reg-S (UNSUBORDINATED)
XS0234088994
Renditen (Achtung grobe Schätzung)
PBA15:
CY 16,4% YTM 27,4%
PBA17:
CY 12,3% YTM 18,6%
PBA18:
CY 15,9% YTM 23,8%
PBA21:
CY 18,12% YTM 23,62%
PBA28:
CY 18,16% YTM 21,7%In other words, the USD warrants are currently trading at about 55% of their theoretical value.
Aus Bulltick vom 28.06.12:
"Also, as we argued in our last monthly publication, we continue to think that Argentina GDP warrants remain a very attractive buy. Despite all the negative pieces of news that have plagued the markets in the past couple of quarters, and despite the material increase that has taken place in Argentine USD-denominated interest rates following the nationalization of YPF, our GDP warrants valuation model does show that there is very significant upside potential in prices from current levels. According to the output delivered by our in-house valuation model (based on 240+ stochastic growth paths going from 2013 to 2035), the current theoretical price of the USD warrants should be around USD $18, assuiming that the interest rate of the USD-denominated Par Bonds stabilize at around 13% going forward, and even if Argentina grows only 2% in 2012 (i.e. below the growth payment threshold of these instruments). In other words, the USD warrants are currently trading at about 55% of their theoretical value.
According to our models, if the Argentine economy were to grow +2% y/y in 2012 (based on INDEC's number), and 4.5% y/y in 2013 (keep in mind that Argentina's historical economic growth standard deviation stands at 6%, so it is logical to expect an upward move on growth in 2013 if the world does not collapse), the payment for fiscal year 2013, which will be payable in December of 2014, could feasibly come at USD $7 (assumes that the official USDARS trades at $5.7/USD by the end of 2013). Bottomline: an investor that holds a USD Warrant at this time, and holds it ex-post December 2014, will receive total cash amounting to USD $13.4 plus an optionality to receive an additional USD $23 in dividends from 2015 until 2035. The current price of the USD Warrant stands at $9.9."
"Also, as we argued in our last monthly publication, we continue to think that Argentina GDP warrants remain a very attractive buy. Despite all the negative pieces of news that have plagued the markets in the past couple of quarters, and despite the material increase that has taken place in Argentine USD-denominated interest rates following the nationalization of YPF, our GDP warrants valuation model does show that there is very significant upside potential in prices from current levels. According to the output delivered by our in-house valuation model (based on 240+ stochastic growth paths going from 2013 to 2035), the current theoretical price of the USD warrants should be around USD $18, assuiming that the interest rate of the USD-denominated Par Bonds stabilize at around 13% going forward, and even if Argentina grows only 2% in 2012 (i.e. below the growth payment threshold of these instruments). In other words, the USD warrants are currently trading at about 55% of their theoretical value.
According to our models, if the Argentine economy were to grow +2% y/y in 2012 (based on INDEC's number), and 4.5% y/y in 2013 (keep in mind that Argentina's historical economic growth standard deviation stands at 6%, so it is logical to expect an upward move on growth in 2013 if the world does not collapse), the payment for fiscal year 2013, which will be payable in December of 2014, could feasibly come at USD $7 (assumes that the official USDARS trades at $5.7/USD by the end of 2013). Bottomline: an investor that holds a USD Warrant at this time, and holds it ex-post December 2014, will receive total cash amounting to USD $13.4 plus an optionality to receive an additional USD $23 in dividends from 2015 until 2035. The current price of the USD Warrant stands at $9.9."
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