Archive for the ‘Argentina’ Category

Argentine Leader Defies Wall Street for Main Street

| August 1st, 2014 | No Comments »
Wall Street Journal WSJ-01

By JUAN FORERO, KEN PARKS and SHANE ROMIG

BUENOS AIRES—Argentines awoke Thursday to find their country was once again a financial pariah after President Cristina Kirchner, a populist known for picking political fights, stared down Wall Street hedge funds and pushed her country into its second default in 13 years.

Her refusal to settle with bondholders owed $1.6 billion could prove politically expedient in the short term: It distracts from Argentina’s slowly crumbling economy and shores up her support among many working-class Argentines who form the base of her Peronist movement, economists and analysts say.

But like many of Mrs. Kirchner’s combative moves since she became president in 2007, this one is fraught with risk, potentially deepening an economic recession, weakening a fragile peso and adding to a rate of inflation that at more than 40% is among the world’s highest.

“From the point of view of the real economy, I don’t see any benefits,” said Martin Redrado, ... Read More

Argentina in denial over debt dispute

| August 1st, 2014 | No Comments »
BBC

By Robert Plummer

Right from the start, the Argentine government’s attitude to its debt dispute with US hedge funds made it all but inevitable that the country would fail to reach a compromise.

“We’re not going to default, they’ll have to invent a new term to define what’s happening,” said President Cristina Fernandez de Kirchner last week, deep in denial, as the deadline loomed for the country to meet its obligation to the so-called “vulture funds”.

Thanks to a US court decision, Argentina is required to pay $1.3bn (£766m) to investors who bought its bonds at a big discount after its economic meltdown and previous default in 2001-02.

It failed to do so by 30 June and a 30-day grace period has now expired.

But the government resisted that course of action, because it feared that it could lead to the unravelling of other debt deals that it struck with ... Read More

Argentina slides into default as debt talks fail

| July 31st, 2014 | No Comments »
Article originally appeared in the Associated Press

By CLAUDIA TORRENS

NEW YORK (AP) — The collapse of talks with U.S. creditors sent Argentina into its second debt default in 13 years and raised questions about what comes next for financial markets and the South American nation’s staggering economy.

A midnight Wednesday deadline to reach a deal with holdout bondholders came and went with Argentine Economy Minister Axel Kicillof holding firm to his government’s position that it could not accept a deal with U.S. hedge fund creditors it dismisses as “vultures.” Kicillof said the funds refused a compromise offer in talks that ended several hours earlier, although he gave no details of that proposal.

“We’re not going to sign an agreement that jeopardizes the future of all Argentines,” Kicillof said after he emerged from the meeting with creditors and a mediator in New York City. “Argentines can remain calm because tomorrow will just be another day ... Read More

Argentina hours away from bond default

| July 30th, 2014 | No Comments »
BBC

By Katy Watson

Argentina’s economy minister is expected to return to the negotiating table on Wednesday in a last-ditch attempt to prevent the country defaulting on its bonds.

Axel Kicillof’s talks with “hold-out” investors ended late on Tuesday night in New York without agreement.

They are demanding a full pay-out of $1.3bn (£766m) on the bonds they hold.

A US judge has ruled that the “hold-outs” must be paid by Wednesday night if no deal is agreed.

But thousands of miles away in Buenos Aires, many are sceptical that there can be any agreement.

The government’s rhetoric has been clear.

The “hold-outs” are US hedge funds that bought debt on the cheap during Argentina’s darkest hours and never agreed to restructuring.

President Cristina Fernandez de Kirchner calls them vultures, accusing them of taking advantage of Argentina’s debt problems to make a big profit.

What makes the problem worse is that if the “hold-outs” get their ... Read More

Argentina in last-ditch effort to avert default

| July 29th, 2014 | No Comments »
Yahoo News-01

By ALMUDENA CALATRAVA and LUIS ANDRES HENAO

BUENOS AIRES, Argentina (AP) — Argentina’s government said Monday it will make another effort to reach a deal with US. creditors ahead of a looming deadline that risks sending the country into its second default in 13 years.

Cabinet Chief Jorge Capitanich said an Argentine delegation would be in New York to meet with a court-appointed mediator Tuesday, just a day ahead of the deadline.

“Argentina’s position is to reach a dialogue that establishes fair, legal and sustainable conditions for negotiation with 100 percent of the bondholders,” Capitanich said at a news conference at the presidential palace.

But the mediator, Daniel A. Pollack, said in a statement that while the Argentines would meet him, they had not yet accepted his recommendation of face-to-face talks with the plaintiffs in the dispute, led by New York billionaire Paul Singer’s NML Capital Ltd.

... Read More

IMF sees ‘substantial costs’ of an Argentina default

| July 25th, 2014 | No Comments »
From AFP

The IMF’s chief economist warned Thursday that a default by Argentina in its battle with holders of its defaulted debt may hurt its economy and the global financial system.

“If it goes into default and doesn’t pay the holdouts, there might be substantial costs, being basically unable to access markets for some time,” said Olivier Blanchard, head of the International Monetary Fund’s team of economists.

Blanchard, speaking at a news conference on the latest IMF growth forecasts for the global economy, also emphasized that “there’s a cost to the world in the sense that we need resolution systems which work well when countries are in trouble.”

Under a US court order, Argentina has until next Wednesday to either pay certain hedge funds demanding full payment on defaulted bonds or risk being declared in default.

Blanchard said the Argentina case means “there’s much more uncertainty as to how we’ll be able to restructure ... Read More

Argentina: se aplaza reunión entre gobierno y “fondos buitre”

| July 23rd, 2014 | No Comments »
BBC

La reunión programada para este miércoles entre el gobierno de Argentina y los representantes de los llamados “fondos buitres” ha sido aplazada.

Ambas partes debían encontrarse en EE.UU., en la oficina del mediador judicial Daniel Pollack.

No obstante, el abogado hizo saber este miércoles que la reunión no podría realizarse y que tendría que ser aplazada “debido a que los argentinos dijeron que no podrían llegar a tiempo” a Nueva York.

El Ejecutivo argentino litiga contra un grupo de inversionistas que reclaman una suma millonaria por los títulos de deuda soberana impagados cuando el país cesó pagos por unos US$100.000 millones.

Más del 90% de los tenedores de bonos se han acogido a las quitas ofrecidas por el gobierno, pero los fondos con los que ahora litiga el gobierno no han aceptado rebajas.

De hecho, el gobierno los califica de “fondos buitre” porque considera que pagaron precios muy rebajados por sus títulos en lo peor de ... Read More

U.S. Judge Denies Argentina More Time to Negotiate With Creditors

| July 23rd, 2014 | No Comments »
Wall Street Journal WSJ-01

BY NICOLE HONG

A U.S. District Judge in a hearing Tuesday didn’t grant Argentina’s request for more time to negotiate with holdout creditors, directing both parties and their lawyers to meet with a court-appointed mediator to reach a settlement.

On Monday, Argentina asked Judge Thomas Griesa to allow it to make the interest payment due June 30 on its restructured bonds, which would give the country more time to negotiate a settlement with its holdouts.

Judge Griesa has ruled that Argentina isn’t allowed to pay its restructured bondholders until it reaches a settlement with a group of holdout creditors who have refused the country’s debt restructuring offers since its 2001 default and are owed about $1.6 billion. If Argentina is unable to reach an agreement with the holdouts by July 30, it will suffer its second default in 13 years.

At a hearing in federal court in Manhattan, Judge Griesa told both sides to ... Read More

China’s Xi eyes increased investment in Cuba

| July 22nd, 2014 | No Comments »
Yahoo News-01

Havana (AFP) – Chinese President Xi Jinping is visiting Cuba with hopes of expanding political and economic ties in the fellow communist nation.

The tour of the Americas’ only one-party communist nation is the last leg of a weeklong trip in the region that has already taken Xi to Brazil, Argentina and Venezuela, as he reaches out to resource-rich countries often shunned by the United States and Europe.

The Chinese leader arrived in Havana late Monday from Caracas for the two-day official visit.

Xi aims to make his country — already Cuba’s second-largest trading partner after Venezuela and its primary source of credit — a major investor on the Caribbean island.

Coinciding with his trip, about 50 Chinese entrepreneurs traveled to Havana to explore business opportunities, attracted by foreign investment incentives and the future Mariel free trade zone outside the capital.

“We want Chinese businessmen to invest in Cuba and partner with Cuban companies,” said ... Read More

Argentina Countdown to July 30 Deadline: Default or Boom

| July 21st, 2014 | No Comments »
Bloomberg

By Camila Russo

Argentina is set to default in less than two weeks unless it reaches a deal with holders of defaulted bonds or U.S. courts grant a delay to allow the nation to continue servicing restructured bonds.

U.S. Judge Thomas Griesa blocked the country’s attempt to make a June 30 bond payment, saying it must also comply with an order to pay $1.5 billion to hedge funds and other holders of defaulted bonds that sued for full repayment. As the 30-day grace period winds down, here are three possible outcomes:

1) Argentina and Holdout Creditors Reach a Deal by July 30

A settlement with creditors holding untendered securities from the nation’s $95 billion default in 2001, including billionaire Paul Singer’s NML Capital Ltd. and Aurelius Capital Management LP, would likely be the best scenario for investors.

“Most importantly it would allow Argentina to regain access to international credit markets,” said Mauro Roca, a senior Latin America ... Read More

Argentina nears cliff in risky debt game

| July 21st, 2014 | No Comments »
Financial Times

By Benedict Mander

In “Rebel Without a Cause”, the anti-hero played by James Dean is challenged to a lethal game of chicken in which two cars must race towards a cliff. The loser is the driver who jumps out first. Investors in Argentine bonds must feel as if they are in a re-run of the 1955 film.

“There is no better analogy” for the showdown between Argentina and a group of New York hedge funds seeking repayment of bonds still in default since the country’s 2001 debt crisis, says Marco Schnabl, an Argentine lawyer at Skadden, Arps, Slate, Meagher & Flom. “Who is prepared to get closest to the brink?”

Despite a looming July 30 deadline for Argentina to make interest payments on restructured bonds, which it has been prevented from doing by a New York judge unless it also pays its “holdout” creditors in full, Argentine bond prices have rallied sharply in anticipation ... Read More

Xi heads to Venezuela after inking trade deals with Argentina

| July 21st, 2014 | No Comments »
Global Post

China’s President Xi Jinping departed Argentina Sunday for Venezuela, the next-to-last stop of a Latin American tour aimed at bolstering trade with the region.

The Chinese leader’s charm offensive seeks to secure new bilateral trade deals — particularly for coveted raw materials.

Xi hopes to further develop his country’s strategic relationship with Venezuela, just as Caracas’ ties with the United States — the region’s traditional political and economic powerhouse — are arguably at their lowest point ever.

The countries, which have not had ambassadors in each other’s capitals since 2010, had poor relations during the leadership of late president Hugo Chavez and ties have remained strained under his successor, Nicolas Maduro.

- Warming ties with Caracas -

By contrast, relations have been warming between China and Venezuela where bilateral trade has been steadily rising, exceeding $20 billion in 2012. Beijing now is also the second largest buyer of Venezuelan oil.

Xi’s visit to Caracas is sandwiched ... Read More

Putin’s Pirates Of The Caribbean Tour

| July 18th, 2014 | No Comments »
IBD

Geopolitics: Vladimir Putin blew through Latin America last week, handing out goodies to anti-U.S. regimes. But he insists he doesn’t want to reopen an old spy base in Cuba, which we find disingenuous.

The scope of the Russian president’s visit took the U.S. by surprise. Instead of just attending the World Cup final and a summit of BRICS countries, Putin made an unexpected visit to Nicaragua, with talk of a military land base there. He then flew to Argentina, reportedly with promises for two nuclear plants, and on to Venezuela to offer a credit lifeline.

Last but not least, Putin stopped in Cuba to sign deals on everything from electricity output to exploration for oil with Rosneft (the company whose unsavory oligarch, Igor Sechin, was the target of Wednesday’s sanctions over Ukraine). There was also a dramatic announcement that Russia would forgive 90% of Cuba’s $35 billion debt.

But on Thursday, Putin denied that ... Read More

China, Russia leaders seek South American inroads

| July 18th, 2014 | No Comments »
The Miami Herald

By JOSHUA GOODMAN

It’s enough to make an aging U.S. Cold Warrior shudder.

During overlapping visits to Latin America, the leaders of China and Russia have been welcomed with open arms by governments that are among the most hostile to Washington, including Cuba, Nicaragua and Venezuela. Together with stops in Argentina and Brazil, which both have distanced themselves from the U.S. in recent years, the tours underscore the mix of ideology and economics that’s allowing the two superpowers to expand their influence in America’s backyard.

“These are all countries the U.S. has some real question marks about,” said Kevin Gallagher, a Boston University economist and expert on Chinese-Latin American ties. “It’s going to require some PR so as not to be interpreted in certain, phobic circles as an overt alignment with left-leaning governments at odds with the U.S.”

Both Chinese President Xi Jinping and Russian leader Vladimir Putin said their visits were focused on ... Read More

Argentina Default Worries Renewed as Fernandez Defiant

| July 18th, 2014 | No Comments »
Bloomberg

By Charlie Devereux

Bond trading shows investors are becoming less confident that Argentina will reach a settlement with holders of defaulted debt amid defiant comments by President Cristina Fernandez de Kirchner.

Two weeks after a U.S. judge blocked Argentina from paying interest on its restructured bonds because it didn’t abide by a ruling to pay holdout creditors that won a court order for full repayment, Fernandez dismissed concern the nation risked reneging on its obligations again if it doesn’t reach a deal. The comment deepened the first weekly drop in Argentine bonds in a month, pushing losses to 5.6 percent since July 11 on benchmark notes due 2033.

While the securities have still risen 7.4 percent in the past month on speculation the nation will strike a deal to avoid defaulting for the second time since 2001, Fernandez’s comment underscores the risk Argentina will refuse to negotiate, according to Patrick Esteruelas, an analyst at ... Read More

Argentina and the holdouts

| July 17th, 2014 | No Comments »
The Economist

ARGENTINA’S impressive run in the World Cup meant that, for the past few weeks, the country has existed in a state of football-fuelled bliss. Restaurants were strewn with blue and white streamers; bars extended happy hours; and stores offered discounts. Now troublesome reality has returned. Argentina’s vice-president is under investigation for corruption; its economy is in recession; and its inflation rate is the second-highest in the world. Most pressingly of all, it is less than two weeks away from default.

Last month the Supreme Court of the United States declined to hear Argentina’s defence against NML Capital, a fund that scooped up steeply discounted debt left over from Argentina’s 2001 default, and has been holding out for full payment of principal and outstanding interest. Argentina had been hoping to appeal against a decision by Thomas Griesa, a judge in a New York district court, barring Argentina from paying the 93% of ... Read More

Russia’s Ambitious Energy Diplomacy in Latin America

| July 17th, 2014 | No Comments »
Oil Price

By Nick Cunningham

Russian President Vladimir Putin, seeking to build alliances to counter Western influence, signed several energy deals in Latin America this past week.

The first stop on Putin’s six-day tour was Havana on July 11, where he met with Cuban President Raul Castro. The two sides reached an agreement that could see Russia exploring for oil in Caribbean waters, which would build up Cuba’s offshore oil industry. Putin also decided to wipe away 90 percent of the $32 billion worth of debt Cuba owes Russia, most of it dating back to the Soviet era.

The agreement was no doubt motivated by Putin’s desire to push back against what he views as U.S. meddling in Ukraine. Exploring for oil only a few dozen miles from the U.S. coast is a finger in Uncle Sam’s eye. “We will provide support to our Cuban friends to overcome the illegal blockade of Cuba,” Putin said on July ... Read More

If Argentina Settles Debt Dispute, More Claims Could Come

| July 16th, 2014 | No Comments »
Article originally appeared in the Wall Street Journal

By SHANE ROMIG

BUENOS AIRES — If President Cristina Kirchner opts to settle with two New York hedge funds that have won court-ordered awards of more than $1.5 billion, economists say it will most certainly lead to additional claims that will cost Argentina’s government about $13 billion.

Mrs. Kirchner and her top economic aides have fought against paying out the full value on bonds the hedge funds bought cheap, mostly after Argentina’s massive 2001 default. Calling the creditors “vultures” and their demands “extortion,” the Argentine government says that paying the hedge funds would open the floodgates to myriad suits costing $120 billion and drive the country into bankruptcy.

But economists and former policy makers in Ms. Kirchner’s government said that while Mrs. Kirchner is right about Argentina facing a hefty bill, the cost is likely to be far less than what Argentine officials have claimed. And they say the government could soften the blow by negotiating a payment ... Read More

Citizens’ security is Latin America’s biggest problem

| July 14th, 2014 | No Comments »
The Economist

PEDRO RODRÍGUEZ, head of Nicaragua’s youth-affairs police, grabs the shoulder of 17-year-old Axel Matus and gives it a shake. “He was one of our worst cases,” he says. In most of Latin America, a youth with Axel’s background—gangs, drugs, knife-fights, joblessness—would cringe at such attention from a burly police commander. But Axel stands bolt upright and admits: “My life was utter chaos.”

Not any more. Axel now attends the Juvenile Affairs police headquarters in Managua, where he is given free meals and tuition every day. Besides subjects like maths and English, he is learning how to be a barber (his blade skills now applied with scissors). Hundreds of troubled kids voluntarily study with him, and the police chief knows most of them by name. They are neatly dressed and ooze self-esteem.

Nicaragua’s police force is in danger of giving socialism a good name. The country is one of the poorest in the ... Read More

Putin, Kirchner seek ‘multipolarity’ in Argentina visit

| July 14th, 2014 | No Comments »
Yahoo News-01

By Joshua Howat Berger

Buenos Aires (AFP) – Russian President Vladimir Putin and his Argentine counterpart Cristina Kirchner called for a multipolar world order as Moscow sought to boost ties with Latin America amid heightened East-West tensions.

Putin is on a six-day tour seeking to increase Moscow’s influence in the region at a time when the Ukraine crisis has eroded Russia’s relations with the United States and Europe to their lowest point since the Cold War.

His itinerary includes meetings with a string of leftist leaders critical of the United States and a summit of the BRICS group of emerging countries — an agenda that neatly aligns with his push for a multipolar world less dominated by the West.

Kirchner is meanwhile waging her own fight against Washington, battling a US court ruling that Argentina must pay more than $1.3 billion by the end of the month to hedge funds refusing to ... Read More

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