After a year and a half in default, the Government proposed to bondholders pay US $ 6.5 billion; so far accepted two of six vulture funds
NEW YORK In a new attempt to end the protracted dispute over debt default opened 2001, Argentina submitted an offer to pay the holdouts, creditors who rejected swaps titles 2005 and 2010, which includes a debt reduction of around 25% on the value of their claims.
after a week of intense negotiations, secretary of Finance, Luis Caputo, raised the proposal to the bondholders who obtained final judgments of US courts for about US $ 9 billion. If the offer is thriving and all creditors accepted, will charge about 6.5 billion dollars.
The offer has until now an open end. For now, the vulture funds that opened the door to the supply and demand historical “pari passu” presented in the court of Judge Thomas Griesa, led Elliot Management, the magnate Paul Singer, did not accept the offer.
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It remains to convince the hardest cast of creditors
“this dispute has gone on for almost 15 years since the original default Argentina in 2001, and the proposal of Argentina is a historic breakthrough, “he proclaimed in a statement Daniel Pollack, the mediator appointed by Griesa to guide negotiations.
the message, the more enthusiastic and optimistic Pollack since joining the litigation, antagonistic to that issued in July 2014, when the negotiations failed and Argentina fell into “technical default”, was full of praise for the Argentine government.
Pollack said discussions had been “intense, but civilized” and had made “tremendous progress”. He praised the “courage and flexibility” of President Mauricio Macri and the Minister of Treasury and Finance, Alfonso Prat-Gay, with whom he spoke by phone to solve a problem “long-winded they did not create.” And he said Caputo and deputy cabinet chief, Mario Quintana, had made “significant contributions and tireless” in meetings, and other officials had been working “around the clock” to facilitate the negotiations, including the chief of staff, Marcos Peña.
the proposal to bondholders is subject to two conditions: it must be approved by Congress must repeal the “lock law” and Griesa have to lift the injunction that prevents the payments Argentina bondholders who participated in the 2005 and 2010 swaps.
This was the first formal offer made the Argentina all creditors who have obtained favorable rulings in the court of Griesa. In 2014, the government of Cristina Kirchner had offered the vulture funds that boosted demand “pari passu” the same offer he made in the 2010 debt exchange.
Of the six largest funds with Caputo negotiated this week, Montreux and Dart Management Partners and Argentina accepted the offer, and four others, Elliot, owner of NML Capital, Aurelius Capital which also negotiates on behalf of Olifant and Blue Angel-, Bracebridge and Davidson Kempner Capital, the they rejected. Pollack was hopeful that with further negotiations, differences with those funds will be resolved, and said that all funds were “work constructively” to this end.
Leaving offices Pollack, dress casual because without a suit and tie, Caputo, visibly tired, told reporters he was “delighted” by the “enormous progress” achieved this week.
“it’s a team effort. We are the just that will come “, defined, after thanking the support of Macri, Alfonso Prat-Gay and Pena, and before getting into a black van that took him to the airport.
it would not have improved
Caputo continue talking to NML and the rest of the toughest funds. The intention is to “close all” creditors said, though ruled improve the proposal.
“This is the best deal, and we are having very good acceptance, not just two of the most difficult funds, but most me too “, defined. He did not give a specific percentage of acceptance. Many creditors have yet to give a final answer.
Anthony Constantini, attorney Duane Morris study, representing individual bondholders and funds that make up the universe of me too with claims for more than a billion dollars, he said his clients “there is still no agreement.” Constantini spent “several hours” in the offices of Pollack. Caputo said, was “very kind and reasonable, but still there is no agreement.”
“There are some customers who do not believe that the offer has been good enough, and there are some customers who have questions have not been answered yet, “he told la Nacion Constantini.
If the proposal is successful, the holdouts charged in cash, which failed to bondholders who exchanged their bonds in 2005 and 2010. To get the money, the government plans to issue new bonds.
the creditors may now choose between two options. The “base offering” available to all creditors, involves a payment equal to 150% of the owed original capital, the same deal that closed Caputo 50,000 Italian bondholders of the group headed by Nicola Stock. The second alternative, called particularly “offer pari passu” to the me too and or funds provided in the writ of Griesa, have no monetary judgment, it carries a rebate of 30% of the claim, either on a sentence or the accrued value of the claim even without trial.
Caputo left with a promise to return to New York, although I do not anticipate when.
Support the proposal
Daniel Pollack
mediator
“This dispute has gone on for almost 15 years since the original default of Argentina in 2001, and the country’s proposal is a historic breakthrough “
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Billion
is the proposal elpaís pay bondholders who obtained judgments 9000000000
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