e: Default Argentina Bonds / Status Update
Dear Clients:
This is a status report on recent events in connection with your bond claims.
The Argentine finance secretary, Luis Caputo, and other representatives visited New York during the week of Feb. 1 for settlement negotiations. The government reached agreements in principle with two of the smaller investment firms that had been part of the hedge fund plaintiff group. The amount of those settlements is disputed, but we are confident they do not set an attractive example for our clients. Argentina separately settled with Italian bondholders who were arbitrating their claims through an international organization, also at levels we would not recommend to our clients. Representatives of the four largest hedge funds and Michael Spencer of Milberg met with Sr. Caputo, but the government did not even make a settlement offer to us.
It is apparent that Judge Griesa very much wants the cases to settle so he can retire. The special master, Daniel Pollack, is putting pressure on us to settle. Last Thursday, Argentina, using a new law firm instead of Cleary Gottlieb, asked Judge Griesa to “lift” (dissolve) the pari passu injunctions we worked so long to obtain. This is an unfair effort to pressure remaining bondholders into accepting the 27.5% / 30% haircut terms that Argentina is now offering publicly. Argentina seems to be approaching these matters unilaterally (not through negotiations), which is reminiscent of its 2005 and 2010 swap offers. It does not reflect well on President Macri’s administration.
Argentina is trying to coerce bondholders into accepting a proposed settlement on terms it dictates. We are resisting this coercion and opposing Argentina’s motion to lift the injunctions, and we expect to prevail, at least in the appellate court. We urge our clients not to accept Argentina’s current offers. All remaining bondholders are united in seeking to negotiate a better settlement with the government.
Best regards,
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