Case study on Sovereign Debt (Argentina)

[CityFarmer]

Latest update. The Argentina's gov is losing for the default issue...

Argentine central bank chief resigns amid economic turmoil
02 Oct 2014 07:01
[BUENOS AIRES] Argentina's central bank governor resigned on Wednesday, the president's office said, as the country grapples with an economic slowdown, a debt default and a damaging row with the United States.

Juan Carlos Fabrega's decision to quit after less than a year in the post comes a day after an emotional President Cristina Kirchner alleged in a televised address that domestic and US interests were pushing to devalue the peso, topple her center-left government - and even kill her.

Argentina's economic woes have been piling up in recent months, with annual inflation estimated at nearly 40 per cent, the value of the peso tumbling and a bitter court dispute with two hedge fund creditors forcing the country to default on its debt for the second time in 13 years.

Underlining the economic morass, the Buenos Aires stock market fell 8.22 per cent to close at 11,516.28 points after Ms Kirchner's address and amid speculation that Mr Fabrega was on his way out.
...
Source: Business Times Breaking News

[sgd]

http://survivalbackpack.us/argentina-pre...ting-oust/

[CityFarmer]

http://survivalbackpack.us/argentina-pre...ting-oust/

Conspiracy is always a juicy story for general audience. It is also a very convenience one.

[CityFarmer]

IMF's (an interested party's) view on the Argentina case...

IMF urges sovereign bond changes after Argentina case
07 Oct 2014 06:41
[WASHINGTON] The International Monetary Fund on Monday urged changes in sovereign bond contracts as Argentina remained mired in a US court battle with "vulture funds" years after its massive debt restructuring.

The IMF said standard clauses in bond contracts between governments and their creditors need recasting and strengthening to make restructurings go smoothly after a country defaults.

Specifically, changes could avoid a situation like Argentina's where a minority of "holdout" creditors could upset a restructuring by refusing to join and seeking full repayment.

The New York court's 2012 ruling in favor of the Argentine holdouts, the IMF said, established "potentially far reaching" interpretations of bond contract clauses that could affect other sovereign bond issues.

With the IMF often deeply involved in rescuing a country after it defaults, it has a deep interest in ensuring that such restructurings - like that of Greece's 206 billion euros (US$258 billion) in borrowings in 2012 - work out.

"If future courts interpret the New York court decisions broadly, there is a significant risk that the sovereign debt restructuring process will become more complicated," said the IMF.
...
- AFP

Source: Business Times Breaking News

[CityFarmer]

The latest update on the "default"...

Argentina default spreads to Par bonds, raising acceleration risk

BUENOS AIRES/NEW YORK - Argentina's debt default spread to its Par bonds on Friday after the country failed to complete an interest payment, raising the risk that creditors could demand that its cash-strapped government immediately repay all of its debt.

The country last month deposited a $161 million payment with a newly appointed local trustee to try to circumvent U.S. court orders for it to settle with "holdout" investors suing for full repayment of bonds from a 2002 default before paying debtholders who accepted a restructuring.

Yet Par bondholders faced legal and technical hurdles in collecting the payments, and the 30-day grace period since the coupon was originally due expired at midnight Thursday.

The economy ministry has not said whether any bondholders have come forward to collect.

Argentina had already defaulted in July on its Discount notes, but holders of the Par bonds are more likely to claim the accelerated payment of the principal because they are trading at a steeper discount to their original value.

An acceleration could leave Argentina facing claims of up to $30 billion, more than it holds in foreign reserves.
...
http://www.todayonline.com/business/arge...ation-risk

[CityFarmer]

My best wish to her. It might be due to too much pressure on her, from the US 'vulture funds"...

Argentina president stable in hospital, will need rest after release

BUENOS AIRES - Argentina's President Cristina Fernandez was in stable condition on Wednesday while being treated in hospital for a bacterial infection of the colon, and will have to rest up for at least 10 days after her eventual discharge, according to a government statement.
...
http://www.todayonline.com/world/argenti...er-release

[specuvestor]

I've heard of accused having passports impounded but never the agents eg lawyers as well (excluding jurisdiction like Mongolia ). Singer is really bold in testing all limits, including seizing Argentina warship incident which I thought was really novel. Not enough persistency or thick-skin also cannot do...

"Billionaire hedge fund managerPaul Singer’s NML Capital Ltd. asked for an emergency court order to keep Argentine lawyer Cesar Guido Forcieri in the U.S. to answer questions about assets that might be tapped to pay off $1.7 billion in judgments against the South American nation. "
http://www.bloomberg.com/news/2014-11-05...5c3004a31b

[sgd]

I've heard of accused having passports impounded but never the agents eg lawyers as well (excluding jurisdiction like Mongolia ). Singer is really bold in testing all limits, including seizing Argentina warship incident which I thought was really novel. Not enough persistency or thick-skin also cannot do...

"Billionaire hedge fund managerPaul Singer’s NML Capital Ltd. asked for an emergency court order to keep Argentine lawyer Cesar Guido Forcieri in the U.S. to answer questions about assets that might be tapped to pay off $1.7 billion in judgments against the South American nation. "
http://www.bloomberg.com/news/2014-11-05...5c3004a31b

according to argentinian authorities singer picked up the bonds for $48mil he's holding out for 100 percent par which would amount to $300mil that's over 600% return now we know why they coin it 'vulture'

around 92% of investors already accepted the 70% haircut when the default happened, Singer belongs to the 8% still holding out.

[CityFarmer]

A belated ruling?

U.S. judge says Citigroup can process Argentina's next bond payment

EW YORK - A U.S. judge ruled on Monday that Citigroup Inc could process an expected $85 million interest payment by Argentina on bonds issued under its local laws following its 2002 default.

U.S. District Judge Thomas Griesa in New York said Citigroup could process the Dec. 31 payment it receives on U.S. dollar-denominated Argentine law bonds.

The judge, meanwhile, called off a Dec. 9 hearing previously scheduled for arguments on whether the bank could regularly process payments Argentina makes on the bonds. Briefing will also be deferred until 2015, Griesa said. REUTERS
http://www.todayonline.com/business/us-j...nd-payment

[CityFarmer]

I admire her, as a fighter...

Argentina's Fernandez, back on job after infection, vows to fight hedge funds

BUENOS AIRES - Argentina's President Cristina Fernandez returned to the public stage in fighting form on Tuesday after a three-week break due to an infection, declaring in a speech to businessmen she would not be held ransom by hedge funds suing the country.
...
http://www.todayonline.com/world/argenti...edge-funds

My best wish to her. It might be due to too much pressure on her, from the US 'vulture funds"...

Argentina president stable in hospital, will need rest after release

BUENOS AIRES - Argentina's President Cristina Fernandez was in stable condition on Wednesday while being treated in hospital for a bacterial infection of the colon, and will have to rest up for at least 10 days after her eventual discharge, according to a government statement.
...
http://www.todayonline.com/world/argenti...er-release