November 27, 2014
‘Vulture’ talks set to launch on Monday
Government confirms meeting with Pollack after ‘vulture funds’ criticize country
Negotiations with holdout investors over Argentine sovereign debt led by NML Capital, or at least the establishment of fair conditions for negotiations, are set to begin on July 7, the Economy Ministry confirmed last night, seemingly bringing an end to speculation over whether the government was going to sit down at the table or not.
The brief statement from the ministry did not clarify if both parties would attend the meeting next Monday, stating only that the government delegation would be meeting with Daniel Pollack, the mediator assigned by Judge Thomas Griesa.
“Judge Griesa said on Friday that if (the government) wants to negotiate, a path that upholds the status quo has to be proposed so that there is no default on June 30,” the release stated, adding that “Argentina thus reiterates its commitment to negotiating under just, egalitarian and legal conditions that contemplate 100 percent of creditors ... allowing restructured creditors to be paid.”
Indeed, before the 7pm release, Jay Newman, senior portfolio manager at Elliott Management, which runs NML Capital Ltd, said the holdout creditors had not met with the government to negotiate a settlement on defaulted debt, and accused the government of refusing to enter talks.
“Argentina’s professed willingness to negotiate with its creditors has proven to be just another broken promise,” Newman said. It was the first time the fund has voiced its opinion since the US Supreme Court’s decision to reject Argentina’s appeal against a lower court order for it to pay both restructured holders and holdouts simultaneously or else face having the country’s funds embargoed.
The quick-fire developments came on the same day as the White House expressed its opinion on the issue for the first time, albeit through a not-very-high-ranking official.
“It’s important not to interfere with the actions of the Judiciary,” said Margarita Riva-Geoghegan, Counsellor (alternate representative) of the US at the Organization of American States, during a meeting by the international organization to approve a special hearing to debate “sovereign debt restructuring” and specifically “the case of Argentina and its systemic consequences.”
Doubts apparently quashed
The announcement of a definitive first round of talks was unexpected, with Cabinet Chief Jorge Capitanich casting doubt over whether Argentina would actually sit down at the table.
“The case is being consulted and studied at the international level,” Capitanich said, not ruling out “starting actions at international organizations” such as the International Court of Justice in The Hague.
Riva-Geoghegan intervened several times at the OAS meeting, calling for a special footnote in the document to schedule Thursday’s hearing in order to make the US stance clear. Somewhat evasively, the US representative said that she had only received the motion on Sunday night, which she argued had not allowed enough time for the country to elaborate its position.
She did praise the “commitment of both sides to find a solution.”
Argentina’s alternate representative at the OAS, Julio César Ayala emphasized the issue “goes beyond financial aspects, as it is a matter of international politics with global and systemic implications and consequences.
Argentina did receive the full support of OAS Secretary-General José Miguel Insulza, of Chile.
He added that he will extend a “special invitation” to the head of the International Monetary Fund (IMF), Christine Lagarde; his counterpart at the World Bank, Jim Yong Kim; and Inter-American Development Bank (IDB) Governor Luis Alberto Moreno to hear their opinions, although their attendance is yet to be confirmed.
Ad rampage continues
In yet another round of full-page advertisement, this time in The Wall Street Journal (US) and The Financial Times (UK) and in capital letters, Argentina said that having bonds under US jurisdiction “does not mean accepting court decisions that are impossible to comply with. All the more so if any such decision violates the sovereign immunity principle effective in the US.”
Once again, the country shifted into offensive mode against Judge Griesa: “The judge’s bias in favour of the vulture funds and his true intention are crystal-clear.” No mention of the grace period was made, and the country reiterated its call for fair conditions to begin negotiating.
European bondholders concerned
Argentina’s English-law and euro-denominated restructured bondholders yesterday requested Griesa exclude their payments from his pari passu ruling, asking the judge to clarify that his court will not attempt to seize payments to them.
“Lacking jurisdiction over those foreign entities (European banks through which Argentina pays bondholders), this Court should now clarify that they are not subject to the injunctions either directly or by operation,” read the motion drafted by Latham & Watkins, a New York law firm.
Herald with Télam, AP, Reuters