Clarin
Vultures: the end of the lawsuit could fall to the next government
Thursday, December 12, 2013
By Ana Baron
At least an agreement outside of court between Argentina and the holdouts, something that seems unlikely, the administration of Cristina Kirchner could leave the resolution of the problem in the hands of the next government.
During a conference about the so-called “saga of pari passu” organized by Cato, a conservative think tank, Richard Samp, a specialists in the U.S. Supreme Court from the Washington Legal Fund, explained that Argentina has until February to file its second appeal before the Supreme Court. But it could ask for a postponement of 60 days, which means that the filing would be made in April 2014. At that time, the Court will have to decide if it asks for the opinion of the government of Barack Obama. It is most likely that it will ask for it, then Solicitor General Donald Verrilli will have 6 to 7 months to file it. Once the Court receives the document it will have to decide if it takes the case or not, which will carry the process to 2015, an election year in Argentina.
Taking the floor, another member of the panel, Arturo Porzecanski, professor at the American University, was tough with the government. “(Cristina) lost control of the street, of inflation, of prices … she doesn’t control anything,” he said, adding that she has taken steps to be friendly with the international community and, if it continues and there is a 180 degree turn, the situation could be different.
Overall, Samp and another of the panelists, Julian Ku, law professor from Hofstra University, agreed by saying that for the Supreme Court the most important thing will be to see if the ruling that orders Argentina to pay the vulture funds 100% of what they are owed at the same time as the bondholders are paid violates the immunity of sovereign states or not.
Ellena Duggar, of Moody’s, said that Argentina is a unique case in line with the report that her company presented some time ago. In that context, it shouldn’t set a precedent for other restructurings like Argentina said in its appeal to the Court. None of the panelists believed that there will be an agreement outside of court.
La Nacion
Vultures: expecting a ruling after 2015
At a seminar in Washington they said that it will be during the next government
Thursday, December 12, 2013
WASHINGTON (From our correspondent).- Experts following the case of the so-called “vulture funds” looked ahead at the possibility that the definitive instance of the Supreme Court will take at the most “until the next government” that succeeds Cristina Kirchner. “With the way things are going, it’s possible that the full run in the Supreme Court will not complete until 2015, which is when the term of President Kirchner ends,” said Richard Samp, of the Washington Legal Foundation. The attorney was one of the five speakers yesterday at a seminar at the Cato Institute, based in this city, dedicated to the question of the litigation over Argentine debt.
American University economist Arturo Porzecanski, for his part, predicted that “at the rate things are going in Argentina, President Cristina Kirchner won’t finish out her term.” In a tough diagnosis, he emphasized that the government “has lost control of things” but that, in recent days, it was made evident that “adding to this was also a loss of control of the streets.”
"When a government loses control of the streets, it’s the same as hearing a voice that says “madame, your helicopter is waiting”,” he argued, in a reference to the one in which Fernando de la Rúa abandoned the Casa Rosada in December 2001.
Introducing the panel, Latin America analyst for the Institute, Juan Carlos Hildalgo, recalled that Argentina “exiled itself” from the markets with its default, first, and with its refusal to pay the creditors after, and with the deterioration of the situation and its persistence in that scenario, doubts arise. Samp downplayed the possibility that the support from the U.S. in a parallel case to the one with the vultures implies underlying support. “Those are different questions and over different things,” he emphasized.
La Nacion
The government makes an offer to pay the debt with the Paris Club
Thursday, December 12, 2013
by Martín Kanenguiser | LA NACION
The government took a relevant step this week to break the paralysis in the negotiation with the Paris Club, through a secret trip by ex-minister Hernan Lorenzino to the French capital.
Official sources told LA NACION that Lorenzino made a proposal, after the claim made by creditor countries, as a condition to unblock access to new lines of financing Fuentes oficiales indicaron a LA NACION que Lorenzino llevó una propuesta, luego del reclamo efectuado por los países acreedores, como condición para destrabar el acceso a nuevas líneas de financiamiento.
Lorenzino traveled on Sunday night to Paris and will return today to report on the results of the trip to the Cabinet Chief, Jorge Capitanich, and Economy Minister Axel Kicillof. The ex-minister traveled together with former Finance secretary Adrián Cosentino.
Since his removal as minister, Lorenzino has headed the debt restructuring unit, in charge of all negotiations on the debts in default: Paris Club, bondholders and companies who sued the country in the arbitral tribunals of the World Bank (ICSID).
While sources didn’t share the details of the offer made by Lorenzino to the countries grouped in the Club, to which Argentina owes about US$9.5 billion accumulated since the end of 2001, it came out that he proposed to them a similar payment - with Bonar X and a haircut – that was offered to the American companies Blue Ridge and Azurix, who had won two separate judgments in the ICSID.
The United States, an active promoter of rapprochement, is open to the government formulating a proposal of this caliber, very different from what President Cristina Kirchner made in 2008, when she proposed to settle with a cash payment from the reserves of the Central Bank. The Obama Administration clarified to Argentina in recent weeks that only a specific offer of payment in Paris Club could change its negative vote against Argentina in multilateral development banks. Officials from the departments of State and Treasury allege that with a settlement of this debt, the country will again have access to lines of credit for public works projects and foreign trade from the Ex-Im Bank, an attitude that would be repeated with the majority of the creditors. In this way, it could end the current paralysis not only in bilateral funding - frozen in 2001 with the default-, but also in the new World Bank loan portfolio, halted since 2012 by the vote of the majority of shareholders, in a context of a sharp drop in international reserves. It remains to be discussed what the role of the IMF will be in this complex negotiation.
But the Minister must not only deal with the different criteria of official creditors, but also with the sign-off of Kicillof, who wants to have the final word on the negotiations before the political blessing of the President. "All efforts by Lorenzino or Cosentino must be endorsed by the Minister,” said a source from the Palacio de Hacienda to LA NACION, to mark the territory.
"They cannot make autonomous decisions," said sources close to the Minister, who yesterday returned from China on a trip he took with Minister Julio De Vido to promote investments from that country in the energy sector. In keeping with the words of the Cabinet Chief at the beginning of this week, at Economy they indicated that "with the Paris Club we’re at the preliminary stage of negotiation," and said that "there will not be an offer that is much better than the one in recent years.” In fact, except for the never-implemented decree, until now there have only been informal talks since late 2005, when Minister Roberto Lavagna launched them in Néstor Kirchner's government.
For Kicillof, as important or more so than Lorenzino’s role is the Ambassador to United States, Cecilia Nahon, his companion in activism from the University of Buenos Aires. "For Axel, Cecilia is like his eyes before the creditors," said the source. In this sense, the sources pointed out that Nahon "had a key role in contact with the government of the United States both in the negotiation at the ICSID as well as the good outcome with the IMF at last Monday's meeting, when it adopted the schedule for the new CPI, and in the filing to the Court of Appeals in the discovery case against the vulture funds.”
For Economy, the Ambassador has a "growing role in the foreign negotiations,” despite the fact that in Washington they downplay it and that the Foreign Ministry appointed another medium-ranking official to have a direct link with Washington, against the suspicion that Foreign Minister Héctor Timerman has toward Nahon.
In parallel, the government is preparing to slow-cook, by next February 14, the appeal before the U.S. Supreme Court in the case of pari passu which it has already lost in two rounds to vulture funds and 13 retail investors. "The idea is to also resolve the issue of the holdouts," they indicated at the Palacio de Hacienda.
Ambito Financiero
The long path for the international financial market to resume its confidence
Thursday, December 12, 2013
by: Carlos Burgueño
In 2014, Argentina must return to the world. Literally. Next year the government of Cristina Kirchner and the post-election economic leadership, led this time by Cabinet Chief Jorge Capitanich and Minister Axel Kicillof, will have the international mission to have the country resume its relations with the international financial world, to end multiple open conflicts with the big economic centers and, sooner or later, reach a height of placing voluntary debt at a reasonable rate for the terms of the country. There is practically no other choice: the rate of the drop in reserves at an average of US$ 140-200 million per day will make it so that the country has to rejoin the financial circuit.
The government is in a difficult time, and is outside the markets, but has a courageous asset on display: since Kirchner came to power, Argentina became a punctual and responsible payer of debt maturities. Beyond the high-sounding statements of Néstor Kirchner and Cristina Kirchner, not always well calibrated and with a responsible view forward, it is true that since 2006 (after the first swap), the country strictly complied with its commitments, many of them expensive and many times with enormous financial effort accounted as effective losses in the valuable reserves of the Central Bank.
Three fronts should be addressed and calibrated before going out to place voluntary debt: to move ahead with a final agreement with the Paris Club, establishing a direct and serious dialogue with the International Monetary Fund and, as much as can be done, reach a definitive solution to the conflict with the vulture funds.
Paris Club and ICSID. Argentina owes to the Paris Club member states about US$7.650 billion in principal; that along with the overdue interest (and which the creditor countries do not want to give up) would come to US$9.5 billion approximately. Then-Economy Minister Amado Boudou attempted a serious approach in early 2009, an attempt that failed by two insurmountable factors: the worsening of the international financial crisis and the round refusal by the government to agree on a pact with the IMF to monitor the economic figures of the country. In those days of local economic growth, it was the European companies which anticipated burgeoning investment the agreement with the Paris Club was signed. Then, the European crisis made any alternative investor shelve any decisions from the Old Continent. There were attempts from October 2011 until November 2013 to reach an understanding. However, the international financing needs along with clear personal political will by Cristina de Kirchner to not leave this issue open beyond 2015, starting in early December 2013, slowly, they have begun to establish new lines of contact. The official intention is to resume the dialogue that was broken in 2009, by which the country sought the possibility to agree on issuing a bond to the creditors with a long term, and with an important haircut. In that year the offer also included, as a gesture of good will, the payment of a first instalment in cash of about US$1 billion, an option that in the times of scarce reserves like now, it’s a utopia. The improved dialogue with the Spanish government of Mariano Rajoy and the good relationship with Françoise Hollande of France are the keys for the possible dialogue. Once again, it is being seen as indispensable the need for a prior agreement with the IMF, an option that the country would be willing to face.
IMF. On the basis of having named and specified the collaboration of the technical staff of the Fund for the new national inflation index, the government must tend to the new relations with the agency, to end a conflict that has already gone on almost six years. Only a political decision from Cristina Kirchner would allow that the country to resume open inspections under Article IV of the charter of the Fund; which, obviously, will require many internal explanations within Kirchnerism. But without this step the possibility of a rapprochement with the international markets will be more and more difficult. On the other hand, the direct possibility of requesting the reopening of credits from the IMF is ruled out for political reasons.
Vulture funds. This year, mandatorily, the government must begin to deal with this conflict, be it through some incipient negotiations opening between private parties (Gramercy - Fintech) and the vulture funds, or by the final rejection or acceptance (and subsequent ruling) from the U.S. Supreme Court on the lawsuit in the U.S. filed by the NML Elliott und. The decision that Cristina de Kirchner makes will depend on how severe the consequences of this conflict will be, after more than 13 years and that, whatever the situation, will be one of the big inheritances for the next presidential administration arising after the 2015 elections.
Keine Kommentare:
Kommentar veröffentlichen