Friday, July 11, 2014

‘Vultures’ in BA lobby for bond deal

Pro-government organizations protest outside the hotel where AFTA met with the press yesterday.

Holdout creditors criticize Kicillof the day before government officials meet with US mediator

As the government prepares to meet with US court mediator Daniel Pollack today for the second time this week, representatives of the American Task Force Argentina (ATFA), a lobby group for the “vulture” funds, visited Buenos Aires to extend the lobby campaign of the creditors that have refused to restructure the country’s defaulted debt.

ATFA co-heads Robert Shapiro and Nancy Soderberg met with a group of journalists yesterday and said the holdouts would be willing to accept a payment offer consisting of bonds, similar to the ones the government agreed to with the Paris Club and Spain’s Repsol.

It was not all conciliatory, however. The lobbyists warned they could seek Argentine assets abroad if an agreement is not reached before the July 30 deadline.

The representatives of the lobby group were in Argentina for a mere 24 hours and intended to meet with opposition leaders but were not able to do so. As part of their campaign, they also published a full-page advertisement in some of the country’s newspapers in which they laid out “myths and facts” about the case.

Former advisers for several US and British politicians, Soderberg and Shapiro are the face of the American Task Force Argentina (ATFA), a lobby group founded by the head of NML Capital, Paul Singer, as part of a media campaign against Argentina mainly in the United States. From 2007 to 2013, they have spent about US$4.5 million to try to shape the view of US politicians regarding the struggle with Argentina, debt experts say.

“The US government didn’t support them in the beginning, so they worked to change that, and were actually effective. In hearings over the discovery case (that allowed the creditors to seek information about Argentine assets abroad), most of the justices seemed in favour of their stance,” Jorge Ignacio Frechero, a debt expert and researcher at CEIPIL international relations think tank who wrote his doctoral thesis on ATFA, told the Herald. “They undertook a lobby campaign focused on US lawmakers as well as the Treasury and State Departments.”

Soderberg and Shapiro made a presentation to outline ATFA’s main goals and its role in the ongoing legal battle, refusing to give details about its clients and their next steps. They played down their representation of NML Capital, the holdout that led litigation against Argentina, claiming the hedge fund is only one of its clients.

“We are not representatives of Elliott, we just want their contracts to be fulfilled,” Soderberg said, according to online news outlet Infobae, one of four media outlets invited to the event, which aslo included Clarín, La Nación and Perfil.

As the presentation took place at a city-centre hotel, pro-government organizations protested outside, holding signs that read “I choose Argentina” and “Get out of Argentina, vulture funds.”

Inside, the ATFA directors pointed fingers at Economy Minister Axel Kicillof and questioned his role in defending Argentine interests in the country’s decade-long legal dispute. Kicillof’s speech at the Organization of American States criticizing hedge funds was described as a “destructive to the kind of trust” needed to reach an agreement.

New meeting

In what will probably be a more technical meeting, a team of government technocrats will meet today with mediator Daniel Pollack in New York, without Economy Minister Axel Kicillof. Argentina needs to seal a deal before the July 30 deadline with investors who rejected its debt restructurings after its 2002 default on US$100 billion.

“Argentina has to show itself as a strong negotiator. There have been mixed signs during the negotiation, but that’s typical at the start of such processes. Today’s the government might offer a payment proposal with the details on how it will pay the debt and when,” Frechero said.

Kicillof, who has settled disputes with the Paris Club of creditor nations and Spain’s Repsol in recent months in an attempt to regain the trust of foreign investors, spent four hours on Monday discussing the case with Pollack and described the session as an “important advance.”

Legal limbo

JP Morgan investment bank, which is in charge of distributing Argentine debt payments to Japanese creditors, sent a letter yesterday to Griesa requesting “clarification” on whether it can send money to its clients, Télam reported yesterday at press time.

Judge Griesa has blocked the government from making a coupon payment on its restructured bonds that was due on June 30. Nevertheless, Argentina sent the funds, which are now in legal limbo. As well as JP Morgan, other financial entities agencies such as Euroclear and Clearstream have sent letters to Griesa asking him to clarify the ruling.

Herald with Reuters, online media