La Nacion Holdouts: Economy is confident of a less harsh ruling than Griesa’s

Lead Articles:

 

La Nacion: “Holdouts: Economy is confident of a less harsh ruling than Griesa’s”

 

Clarin: “Criticism in England over the support the IMF will give”

 

 

OTHER NEWS ITEMS:

·         Perfil reports that unnamed high executives from ExxonMobil will travel to Buenos Aires this week to meet with Miguel Gallucio of YPF to discuss the Vaca Muerta project.  They will also visit the site of the deposit in Neuquen.  “The photo with President Cristina Kirchner and John Watson, CEO of Chevron, on Tuesday at the Casa Rosada, accelerated the plans of ExxonMobil, which had already asked for a bilateral meeting between one of its vice presidents and Galuccio.  This was confirmed to PERFIL by a high government source,” the report notes.  No other information about the pending visit or talks is reported in the piece.

·         Perfil reports that investors are not attracted to the new Baade bond instrument from the amnesty program, because it has a low yield compared to other instruments available on the market.  One unnamed trader is quoted: “One of the problems the Baade has is that it yields 4% in dollars in one year, while the Boden 2015 … yields 7% a year in dollars, by which is why it isn’t expected that investors will voluntarily buy it, and it wouldn’t be a surprise if the government puts more pressure on them to do so.”   The story adds that the local market is waiting on the Bonar VII payment in September, which they expect investors will reinvest in the Boden 2015, which was deemed as attractive for its liquidity by Credit-Suisse analyst Mariano Arrieta, and clients were urged to buy it.  “It expires before the next presidential elections and that limits the chances of a credit event,” the story concludes.

·         The Sunday editions of La Nacion, Clarin and Perfil have articles and op-eds that paint an increasingly dire political situation for the FpV and Cristina.  La Nacion reports that polls are showing that the PRO and the center-left UNEN alliance could potentially be serious rivals for winning the Federal Capital based on the primary outcomes, while the FpV is far behind them with list leader Daniel Filmus in jeopardy of losing his Senate seat and potentially costing the FpV its Senate majority overall in the city alone.  Columnists write of Cristina’s major contradictions between narrative (‘relato’) and actions, with the capital amnesty program and the Chevron deal as major highlights.  In a column in Perfil, former Foreign Minister Daniel Caputo goes as far as saying the government is committing “suicide” and is “on the path to self-destruction” by the combination of “its silence” in the face of scandals, the “contradictions” of things like the Iran accord and the 180-turn from Repsol to Chevron: “Mrs. Kirchner will not resolve any of the scandals that are hitting her, she will yell a lot, there will be harm, perhaps try some dangerous adventures with her new friends, but sooner rather than later she will self-destruct,” he writes.  In a separate piece, Perfil reports that Cristina’s advisers are urging her to end her mourning of Nestor and begin to dress in colors other than black, to help contribute to a change of image. … Meanwhile, the pro-K media, notably Pagina/12 and Tiempo Argentino, point their fire on Sergio Massa and the opposition.  Pagina/12’s cover story is entitled “The Paper Tiger”, “myths vs. reality” about Sergio Massa’s character, his past, his positions and his management of Tigre county.

·         General Cesar Milani gives an interview to Pagina/12 where he says he “can’t understand where these things are coming from” regarding the allegations from former political prisoners of the dictatorship who are publicly accusing him of participating in their abductions and interrogations.  He says that the “attacks” on him are “coming from conservative circles who always counted on the military as their ally.”  But the head of the Grandmothers of the Plaza de Mayo, one of the latest local human rights groups that still is militantly supporting Cristina, said that while she has “full confidence in Cristina” she added that if the charges against Milani are proven, “he is out, immediately, gone.”

·         Perfil reports on “the mysterious jet” that was named in the Lazaro Baez investigation to be one which shuttled bags of cash to Uruguay as part of the operation, which “disappeared” shortly after Nestor Kirchner’s death in 2010.   The story suggests that the plane went to Fort Lauderdale, Florida, on its final flight, carrying two unnamed passenger and four pieces of luggage, and never returned.

 

 

TRENDING TOPICS/ARGENTINA on Twitter:

·         “Milani” and “DDHH” (acronym for “human rights” in Spanish) are trending in this morning’s top 10.

 

La Nacion

Holdouts: Economy is confident of a less harsh ruling than Griesa’s

 

Sunday, July 21, 2013

 

By Martin Kanenguiser

 

The government believes that the Court of Appeals of New York will issue a solomonic ruling in the case that the country faces with the holders of debt that didn’t enter the swap (holdouts).  It is believed that the court could uphold that Argentina violated pari passu and not allow payments in the United States on bonds that are not in default, but it will allow them in Europe.

 

According to what LA NACION found out, the Economy Ministry, led by Hernan Lorenzino, admits that it is difficult to see an acceptance of the proposal presented to try to add the holdouts to the haircut on the debt made in the operations of 2005 and 2010.  But it also finds it likely that it will not uphold the harsh sentence by Judge Thomas Griesa, who ordered the lump sum payment of 100% of what the plaintiffs demand.  “The most likely is that the sentence goes half way,” they said to LA NACION.  

 

In turn, there is no certainty about the time that the Court of Appeals could take to decide about the payment formula and the responsibility of third parties.

 

There is hope, also, regarding the possibility that the American Supreme Court could decide to take the case – the country would gain a year – and that, meanwhile, the execution of the negative ruling of the appeals court would be stayed.

 

In that regard, they emphasize the importance of the filing of “friend of the court” briefs (amicus curiae) from the bondholders that entered the swaps, from the Puente firm, from ex-IMF director Anne Krueger and, soon, the IMF itself.  These briefs, it is pointed out, served for the New York court to better understand the “systemic” repercussions of the ruling they must make.

 

In Economy, they believe that there is a likely scenario of Bank of New York (BoNY) getting “trapped” in an adverse sentence, which will impede the making of new payments in the United States.

 

However, they understand that it’s likely that, under pressure of the bondholders that entered previous exchanges, the court will set aside a potential attachment on Euroclear, as seen in the lawsuit that is being brought forth in Belgium.

 

Weeks ago, the European creditors with Argentine bonds asked in Brussels for an injunction to avoid having the payment at the end of last month being blocked: the Belgian judiciary dismissed it because no such order existed, but it is likely that the petition will be repeated before every maturity of Argentine debt.  If that “window” is upheld, the government could use it to pay the bondholders in Buenos Aires or Europe.

 

Beyond the opinion of officials, LA NACION consulted attorneys Marcelo Etchebarne –partner of the firm of Cabanellas, Etchebarne, Kelly & Dell'Oro Maini- and Eugenio Bruno –partner of the Garrido firm- about the core aspects of the case.

 

·         The term of the sentence: Etchebarne said there “are high chances” that it will be before the changing of law clerks, which will happen at the end of this month; Bruno admitted it “is difficult to estimate the timing.”

 

·         The ruling: they agree that it is very likely that the 100% payment will be upheld, but the doubt is if it will be in one payment or scaled; they expressed their doubts about the involvement of BoNY, but clarified that it’s less likely in the case of Euroclear.

 

·         Payment outside of U.S.: it is seen as complicated.  Etchebarne said that some funds, by statute, “will not be able to accept certain jurisdictions of payment, which will bring it to a partial default.  If they make a swap, it will require the help of BoNY to de-register the nominal value of the bonds, but if this bank is affected by the ruling, it will not be able to do it.”

 

·         The chance that the Supreme Court takes the case: for Bruno, it’s high; for Etchebarne, it’s “very low.”  “Usually, the court takes up important and serious complaints against countries in their chambers,” Bruno said. Etchebarne said: "If there was an attachment outside the U.S., in violation of federal sovereign immunity law, there would be greater chances.”

 

·         Amicus from the IMF: Etchebarne said that “it will not hold influence over the court taking the case or not; in the case of British Gas, the United States asked that it not analyze it and the court ignored it.”

 

 

Clarin

Criticism in England over the support the IMF will give

 

Sunday, July 21, 2013

 

The IMF’s decision to support before the U.S. Supreme Court the position of Argentina in the legal dispute against the vulture funds has provoked strong criticism in the United Kingdom.  The issue was put forth in Parliament, according to an article in the newspaper Sunday Express, under the headline: “The British milk cow: How money from the United Kingdom is helping Argentina fight against the creditors.”

 

The citizens of the Malvinas stirred up the issue, recalled for London that the government of Cristina Kirchner plans to strangle the economy of the Islands.  The newspaper says that “Great Britain gave the IMF around US$50 billion to keep the global economy afloat, and that money is available for its use in loans.”  There is criticism from there against the head of the IMF, Christine Lagarde, who will ask, it said, for a request that the Supreme Court of the U.S. overturn the ruling of Judge Thomas Griesa that ruled in favor of NML.