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Dienstag, 26. November 2013

Clarin Lorenzino will insist on encouraging the agreement of the bondholders and vultures He seeks to do so from his new post.


Lorenzino will insist on encouraging the agreement of the bondholders and vultures
He seeks to do so from his new post.  Doubts over the position of Minister Kicillof.

Sunday, November 24, 2013

by Gustavo Bazzan

About ex-Economy Minister Hernán Lorenzino there is still an unknown: to determine if the new Executing Unit for the Restructuring of Public Debt, which he will lead, is a rubber stamp or a key chess piece for normalizing the debt in default: judgments at the ICSID, Paris Club, and above all, bonds in the hands of the vulture funds.

The fact that Adrián Cosentino left Finance added more questions about the permeability that Axel Kicillof will have on the plan his predecessor looked at pleasingly.

What is clear is that there is no cash.  One could easy see it looking at the new country-risk indicator rom the K-era, which is the Central Bank reserves.  What’s what is pushing negotiating.

From the three fronts there was little news and much speculation.  The concrete fact was that the sentence was paid for five suits in the ICSID.  Rumors restarted around the Paris Club, but not much is known on it and it’s always necessary to separate out the possible from the wishful.

What is happening with the vulture funds is what’s left.  Over there, there are more crumbs.

There are two negotiations in course, in which the government is not participating, but is tacitly encouraging.  The Gramercy fund wants to involve the vulture funds that have won cases in New York court and the bondholders that entered the swap.  Something similar was started by the Garrido firm, with attorney Eugenio Bruno leading it.

With the changes at Economy and the removal of Lorenzino and Finance Secretary Adrian Cosentino, the alarms sounded.  Will the government remain attentive to these proposals?

Those close to Gramercy say that they are convinced that the government is still interested.

In fact, they are moving forward on the formal proposal.  And they are seeking an investment bank and the heavy betting is on hiring Lazard Freres. Coincidence? This bank was hired as the financial adviser for then-minister Roberto Lavagna when he launched the first debt swap in 2003.

Also, Gramercy hired Jim Millstein, former U.S. Treasury official who was in charge of the mega-restructuring of debt by the insurance firm AIG and Citi, in the middle of the financial crisis of 2008.

Attorney Eugenio Bruno told Clarin that his plan “agrees with the new government posture of resolving these problems with this focus, which is financing for public works projects and spreading out the heavy debt maturities of the coming years.”

Bruno’s plan is to commit the bondholders and vultures to subscribe to new Argentine bonds and, additionally, attract investments for the energy sector.  This negotiating group is also at the point of hiring a financial advisor to get the proposal moving.

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