“Argentina has paid, it pays and honours its financial commitments. There is no such a thing as ‘technical default,’ it is a fabrication of credit rating agencies, of these tiny groups of speculators,”

Tuesday, July 29, 2014

Technical default, a 'fabrication of rating agencies'

Only a day ahead of the deadline set by US Judge Thomas Griesa for Argentina to pay in full to holdout bondholders, Cabinet Chief Jorge Capitanich said “there is no such a thing as a ‘technical default,’ stressing the country has paid creditors and accusing Griesa of not allowing them to receive payment.

“Argentina has paid, it pays and honours its financial commitments. There is no such a thing as ‘technical default,’ it is a fabrication of credit rating agencies, of these tiny groups of speculators,” the Kirchnerite official said when asked about the consequences for the country if no settlement is reached with the so-called vulture funds.

“They need to explain the Argentine people, and the world, why they are preventing the payment that Argentina has made,” he added. “This is the first time a debtor pays, honours its commitments and a judge determines the opposite.”

Capitanich also criticised the judge’s recent decision to allow Citigroup bank to process payment on dollar-denominated Argentine bonds held under local law on a one-off occasion. “It is a circumstancial measure that creates a new problem, that is determining what belongs to Repsol and what to other bondholders,” Capitanich stated.

The official defended the government’s strategy in the legal battle against the holdouts and accused them of “acting in bad faith”, in a “belligerent attitude” that aims only to prevent a solution to the situation.

CALL FOR AN INVESTIGATION

The Kirchnerite official criticised the holdouts “three-way” strategy and called the US Judiciary for an investigation. “They own bonds with favorable rulings, restructured bonds and also an insurance in case of failure to pay”.

He said the US Securities and Exchange Comission (SEC) “should look into that three-way strategy because it constitutes market manipulation”.