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Samstag, 2. August 2014

Delegations will continue with meetings all weekend, are increasingly close to a settlement. This is an arrangement "between private." Neither government nor Griesa in between. Seconds out

Foreign banks are overcoming obstacles and continue negotiations with vultures

By: Guillermo Laborde
Vulture funds and three foreign banks seeking to buy the claim of the holdouts positions Friday approached and eliminated many of the existing barriers. Those involved in the negotiations are Citibank, JP Morgan and HSBC.'s New is that joined the Deutsche Bank.'s Not just the JP Morgan (Argentine Martin Brown is by this entity) as known through a article in The Wall Street Journal on Thursday, but that, as from the start of the negotiations, are executives of the three banks that move together (by Citi is Juan Bruchou). 

This Friday was a day of intense negotiations to further advance the initiative had an agreement in principle Tuesday. "In the last hours progress was made ​​and we are very optimistic that can be closed soon," said a banker who sat at the negotiating table. 

Sources close to the representatives of these entities confirmed what has been drawing since Wednesdayambito.com on that foot was always in agreement with the possibility of private and provided new details.Firstly what is being defined is buying a part the claim and not the u $ s 1,650 million ordered by Griesa. recalled that at the time agreed with the plan of Argentine banks, was 100% and u $ s 1,400 million.In this case, the solution, again according to the same source, go through a "substantially lower percentage" but enough to order and reinstate the injunction or "stay" in the court of Griesa, which would bring to Argentina's default . 

Negotiations are time trial, giving in parallel fears that go speeding payments or Par Discount bonds. It should be noted at this point that 25% of a number, you can ask 100% of the residual value of the bond and that Argentina has two months after the acceleration to stop making 50% or by paying the defaulted paper, Discount is the originally expired on June 30. 

"Time to spare for anything," the source confided. Is that beyond what was agreed with the vultures, actually speaking with Jay Newman basically Elliot (the highest executive of the firm after Paul Singer), there are steps that remain after the eventual signing. Basically banks must complete the union and therefore distribute the amount to be paid, an estimate could be around u $ s 400 million, including Argentine participants. Rogelio Frigerio Thursday City Bank left open the possibility that ADEBA, the group that brings together banks of Argentine capital, participate "in any other mechanisms that emerge to give a solution." Two months of acceleration set limits. 

The big question in the markets and negotiators emerged was how to recover the investment in buying the claim. What if Argentina in January after not negotiate anything? If there was a commitment from the Government RUFO clause was activated. And if there is not, the banks can not have that amount without any coverage. The apparent solution would simply buying just a part of the claim but enough to return to replenish the stay. And that part of the claim purchased could be offset by the gain of the roles and entities in the portfolio. On Wednesday the euphoria about the potential agreement, country risk fell 20%. On Thursday rose 13% after the default and was not fired because he had more hope in the efforts of the three banks. This Thursday jumped another 8.5%. Thus, the government would simply be a "voyeur" in the transaction. Officials consulted said totally ignoring what was brewing in New York. Argentine companies also would join the operation in the second stage. 

Delegations will continue with meetings all weekend, are increasingly close to a settlement. This is an arrangement "between private." Neither government nor Griesa in between. Seconds out

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