Argentine Senate begins consideration of debt 'normalization' bill following approval by Lower House
The administration of president Mauricio Macri overcame a first hurdle in the Argentine congress to have its “debt normalization” bill approved, which should help bring to an end years of litigation with the holdout funds and open access to global money markets in normal conditions.
At 8:30 Wednesday morning after twenty hours of uninterrupted debate the Lower House derogated the so called “padlock and sovereign payments laws”, and supported the normalization bill by 165 to 86, opening the way for its consideration in the Senate.
The Macri administration which does not have a majority in Congress managed support from opposition groups, open to dialogue, and provincial blocks while former president Cristina Fernandez Victory Front voted against.
To start with the ruling “Let's Change” group had to appeal for support from dissident Peronists to manage the necessary quorum (147) attending to consider the bill in support of the pre-agreement reached by the current administration with the holdouts and blessed by Judge Griesa and Master Daniel Pollack.
Over a hundred lawmakers made speeches during the long, at time rough, debate, which introduced some changes to the original bill, the toll for support and to convince different groups' followers on such a sensitive issue for Argentina's electorate.
The opposition Victory Front lawmakers only walked in to the floor once the quorum was confirmed and supporters of the bill included a condition which says the bill becomes effective once the New York federal appeals court lifts the injunctions on Argentina's funds deposited in US banks.
Another condition imposes a presentation from 65% of bondholders in the event Argentina defaults on the new bonds' issue to pay current litigants, estimated to be in the range of 12 to 15bn dollars.
Lawmakers supporting the debt normalization bill also imposed a 12bn roof for the new issue, and close monitoring from Congress on debt issues.
In the Upper House the ruling coalition of Macri has even less Senators but based on previous announcements there is a majority willing to support the bill, including members of the opposition Victory Front. The debate is expected to begin this week.
Argentina has until 14 April to pay in cash, the litigant bondholders which reached the pre-accord under the supervision of Master Pollack. The bills should open the way for Argentina to issue the new bonds and pay creditors.