Argentina Debt

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Argentina Debt

#1  Postby Ihavenofingerprints » Aug 01, 2014 10:35 am

Some interesting articles have been popping up. Argentina seem to be missing interest payments on their bonds, and creditors who would supposedly make a profit from an Argentine default are pushing hard (if that makes sense :D). This might be one to watch. If you know a good deal about this I'd be interested in a summary.

The hedge fund firm of billionaire Paul Singer has about 300 employees, yet it has managed to force Argentina, a nation of 41 million people, to default on its debt for the second time in 13 years.
Argentina failed to make scheduled payments by midnight, Wednesday, New York time on its government bonds. The country has the money to pay the bonds, but a US federal court in Manhattan has ruled that unless Argentina settles its debt dispute with Mr Singer's firm, Elliott Management, it is barred from paying its main bondholders.
After more than five hours of meetings Wednesday, the sides failed to reach an agreement and the court-appointed mediator said that Argentina would "imminently be in default." Because a $US539 million ($578 million) interest payment was not made, the ratings agency Standard & Poor's said that Argentina was in default on those bonds.

Read more: ... z398M4uocd

The $24.8 billion fund manager, run by billionaire Paul Singer, last year denied in a U.S. court that it owned credit swaps that would allow it to profit if the government halted payments. Stephen Spruiell, a spokesman for Elliott, declined to comment yesterday.


Argentine Economy Minister Kicillof says the funds are like vultures since they prey on countries in distress and seek massive profits by squeezing governments through embargo attempts and lengthy litigation.

Kicillof says Elliott is seeking a profit of 1,600 percent on its investment of defaulted bonds and would still make 300 percent if it accepted the restructuring terms.

Argentina claims it can’t offer holdout creditors a better deal without violating a “rights upon future offers” clause in the restructured bonds that may trigger additional claims. The clause requires Argentina to extend to the restructured bondholders any improved terms it “voluntarily” offers holders of the defaulted bonds.
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Re: Argentina Debt

#2  Postby tuco » Aug 01, 2014 10:44 am

Good analysis are worth gold. Interesting case, especially if it goes to court.
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Re: Argentina Debt

#3  Postby chairman bill » Aug 01, 2014 10:44 am

Make hedge funds illegal worldwide. The world would be an instantly better place.
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Re: Argentina Debt

#4  Postby Matt_B » Aug 01, 2014 10:55 am

chairman bill wrote:Make hedge funds illegal worldwide. The world would be an instantly better place.

Yes. They're the last unregulated refuge of speculators.

Even if they were brought into the meagre set of rules that apply to mainstream investment banking, that'd be a major improvement.
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