“If the Bank of New York does not change its position, if Griesa does not allow the payment (…), we have ahead the September 30 due date and Argentina will pay,” Kicillof announced ratifying Argentina’s has not defaulted on its sovereign debt and that the Nación Fideicomisos S.A. represents a “safe” channel to secure payment to bondholders, removing the Bank of New York Mellon as payment agent.

Wednesday, August 20, 2014

Kicillof warns 'no change of payment jurisdiction'

Economy Minister Axel Kicillof answers reporters'' queries on Argentina''s new move to ratify the country''s debt restructuring.

Economy Minister Axel Kicillof has briefed reporters on the bill submitted by President Kirchner to Congress yesterday that seeks to change Argentina’s payment "location."

“Argentina has proved a massive, almost unanimous and completely successful debt restructuring,” Kicillof assured as he accused US Court District Judge Thomas Griesa of “clearly favouring” so called vulture funds suing the South American country over its defaulted bonds more than a decade ago.

Saying the ruling by Judge Griesa is “impossible” to comply with as it involves the payment of 1.6 billion dollars to bondholders (including interests) that refused to enter the country’s 2005 and 2010 restructurings, the minister renewed the government’s position that vulture funds never actually intended to accept Argentina's debt swaps.

“These gentlemen bought bonds for 50 million dollars and Griesa says we must pay them now. Griesa says you can not pay the 92 percent of creditors (that did accept the swaps) if you don’t pay those who bought bonds for 50 million dollars that turned into 800 million dollars. A snowball,” Kicillof affirmed accusing the New York magistrate of holding bondholders “hostages” to push for a solution benefiting hedge funds.

Judge Griesa “clearly benefits” 1 percent of creditors “that never entered and never wanted to enter” the debt restructurings carried out by the Kirchnerite administration back in 2005 and 2010.

“We are here to defend our contracts facing a ruling that puts us in a situation of difficulty, to continue honouring (the country’s) commitments. That is the law of sovereign payment that we submitted to Congress and that we will defend,” the head of Argentina’s economic affairs stated adding the bill grants a possibility of "action" to bondholders that have seen their payment held at the Bank of New York as a result of Griesa’s order.

“Argentina will preserve its restructuring because the most speculative 1 percent not of Argentina’s but of the international financial sector will not attack Argentina through lobby (…) jeopardizing what we have done which is to return the 2001 disaster to normal,” Axel Kicillof said alluding to the social, economic and political collapse and historic default the nation plunged into 13 years ago.

“If the Bank of New York does not change its position, if Griesa does not allow the payment (…), we have ahead the September 30 due date and Argentina will pay,” Kicillof announced ratifying Argentina’s has not defaulted on its sovereign debt and that the Nación Fideicomisos S.A. represents a “safe” channel to secure payment to bondholders, removing the Bank of New York Mellon as payment agent.

Explaining that the government was not changing the payment jurisdiction – Griesa has already threatened a contempt-of-court order in such scenario - but seeking a “change of payment location” for bondholders to “collect” their money. “A government can not be banned from servicing its debt,” he insisted ratifying Argentina’s “unbreakable will” to pay.

Kicillof also expained creditors that refused the 2005 and 2010 swaps – only a 7.6 percent of bondholders – will be now able to access the restructuring. “They can come and exchange their bonds (ruled by Argentina’s legislation) and they will get a 300-percent-winning. Paul Singer wants 1,600 percent of profit because he is a vulture. But he can come and get 300 percent (of profit),” the economy minister assured now aiming at head of Elliott Management and US billionaire Paul Singer, one of the holdout creditors in the case.

“We will not allow that any other country or its justices put what Argentineans have done with effort and will continue to do,” Mr. Kicillof warned.