Archive for the ‘Argentina’ Category

Argentina deposits debt payment in defiance of US ruling

| October 1st, 2014 | No Comments »

Argentina has deposited $161m (£99m) in bond interest payments with the state-controlled Nacion Fideicomisos bank, in an effort to skirt US court rulings.

The country had previously kept its funds with US-controlled Bank of New York Mellon.

The move comes a day after a US judge ruled Argentina was in “contempt of court”.

That ruling stated Argentina must repay two US hedge funds before repaying other bond holders.

“By making this deposit, Argentina confirms once again its unshakeable commitment to meet its obligations to bondholders,” said Argentina’s finance ministry in a statement.

Argentina is attempting to pay its bondholders in a second tranche of debt known as the Par series so as to avoid defaulting once more.

However, experts caution that simply placing the debt payment in a non-US controlled bank is probably not sufficient to allow Argentina to avoid a US court ruling barring it from repaying certain debts above others.

Long ... Read More

Argentina’s Contempt

| October 1st, 2014 | No Comments »
Wall Street Journal WSJ-01 South America’s leading deadbeat nation sets another precedent.

Monday’s ruling by U.S. District Judge Thomas Griesa to hold the Republic of Argentina in contempt of court isn’t entirely without precedent. Russia fell afoul of an American court last year in a dispute involving custody of Jewish religious books. The Democratic Republic of Congo was held in civil contempt in 2009 for failing to comply with a district judge’s discovery request.

Yet the Argentina ruling is in a class by itself. “We all know that to hold a party in contempt of court is a rare thing. I was requested to do so at an earlier stage and declined,” Judge Griesa said Monday. But he said he was compelled to recognize “what is really the illegal conduct of the Republic involving the attempt to unlawfully change and depart from the provisions of the governing injunction.”

The judge is referring to the effort by the ... Read More

Juez de Nueva York declara a Argentina en desacato

| September 30th, 2014 | No Comments »
El Nuevo Herald



Un juez federal de Nueva York declaró el lunes a Argentina en desacato por rehusarse a pagar 1.500 millones de dólares a fondos de cobertura estadounidenses en una decisión que Buenos Aires consideró “violatoria del derecho internacional”.

El juez federal Thomas P. Griesa hizo el anuncio después que un abogado de esos fondos, encabezados por NML Capital Ltd., del multimillonario inversionista Paul Singer, alegara que el país desafió abiertamente durante más de un año la orden de pago que había emitido el tribunal.

El juez dejó pendiente cualquier sanción contra el país hasta que se realicen audiencias adicionales.

El gobierno argentino dijo que la decisión de Griesa carece de efecto práctico “salvo proveer de nuevos elementos que sirvan a la difamante campaña política y mediática llevada adelante por los fondos buitre” contra el país.

En un comunicado emitido en Buenos Aires, el Ministerio de Relaciones Exteriores de Argentina afirmo que el ... Read More

Judge Grants Temporary Stay in Argentina Default Case

| September 29th, 2014 | No Comments »
The New York Times

By Alexandra Stevenson

A group of New York hedge funds that sued Argentina is now asking a New York court to lower the temperature a little on the long-running and acrimonious dispute.

The group, led by Paul E. Singer’s NML Capital, appealed on Friday to Judge Thomas P. Griesa of the Federal District Court in Manhattan to allow Citigroup to make a $5 million payment to bondholders by a Tuesday deadline.

After more than two hours of debate, Judge Griesa agreed to a temporary stay on his previous order that had blocked the payment. He also called for another hearing in 30 days to consider arguments from Citigroup that its activities related to the Argentine bonds were exempt from his rulings.

“We do not want to be here over and over again,” Judge Griesa added, referring to what has become an increasingly messy case.

One of the judge’s earlier ... Read More

Argentina calls holdout funds ‘terrorists,’ says Germany ‘hostile’

| September 25th, 2014 | No Comments »

Argentine President Cristina Fernandez accused hedge funds suing the country for full repayment of defaulted debt of practicing “economic and financial terrorism,” heightening the rhetoric in the country’s years-long legal battle with the investors.

Speaking before the United Nations General Assembly on Wednesday, Fernandez said “terrorists are not only those who set off bombs, but also those who destabilize economies, causing hunger, misery and poverty.”

The comment came just hours after Fernandez’s cabinet chief Jorge Capitanich accused Germany of having a “hostile attitude” toward Argentina’s debt restructuring effort, citing an advertisement by the hedge funds which quotes a German official criticizing Argentine policy.

Both flights of rhetoric stem from a case that has become a rallying cry for Fernandez, who often characterizes the funds as “vultures” out to wreck Argentina’s finances in their pursuit of astronomical profits.

“The vulture funds,” Fernandez told the General Assembly, “are ... Read More

Fernández despotrica contra fondos buitres en ONU

| September 25th, 2014 | No Comments »
El Nuevo Herald

NACIONES UNIDAS - La presidenta argentina Cristina Fernández no ahorró adjetivos para condenar a los “fondos buitre”, el enemigo número uno de su gobierno, y los acusó de ejercer “terrorismo económico y financiero” durante su presentación del miércoles ante la Asamblea General de las Naciones Unidas.

Fernández dedicó la primera mitad de su discurso a los fondos de cobertura que motivaron un default técnico de su país y agradeció a la Asamblea General por la sanción de resolución 68/304 del 9 de septiembre, de abocarse a la creación de una convención multilateral que genere un marco jurídico obligatorio en materia de restructuración de deuda soberana de todos los países.

“Cuando se debe el 161% del PBI, la culpa no es sólo de los deudores”, sostuvo la presidenta argentina. “Asumimos la responsabilidad, pero pedíamos que el Fondo Monetario Internacional y los acreedores que habían prestado a tasas usureras también asumieran parte de la responsabilidad ... Read More

Argentina appeals to a higher authority in fight with creditors

| September 23rd, 2014 | No Comments »
Financial Times

By Benedict Mander in Buenos Aires and John Paul Rathbone in London

Argentina’s battle with holdout creditors is taking on ever-broader dimensions as Cristina Fernández, the president, appeals for support from the UN this week after meeting billionaire George Soros and Pope Francis.

In New York, Ms Fernández hopes to recruit Mr Soros in her fight against the holdouts. His Quantum hedge fund holds a 3.5 per cent, or $450m stake, in YPF, the national oil company that would benefit from renewed access to international credit.

She also hopes to build on a rhetorical victory won this month when the UN agreed on a non-binding vote to launch a multilateral framework for sovereign debt restructurings.

Yet analysts increasingly fear Buenos Aires does not have a strategy to solve its mounting economic problems at home, and is simply stumbling from one problem to the next.

“The overall direction of economic policy will likely continue to ... Read More

Citigroup Tells Appeals Court of Its Argentina Quandary

| September 19th, 2014 | No Comments »
The New York Times By Alexandra Stevenson

Argentina is holding a gun to the head of Citigroup, a lawyer for the bank told a three-judge panel in Manhattan on Thursday.

The bank has found itself in an awkward position: It must decide between defying a New York court order or a sovereign government, a move that it says would result in “grave sanctions” from Argentina.

“We’re going to obey, and if we obey, we have a gun to our head and the gun will probably go off,” Karen Wagner, a lawyer representing Citigroup, said.

The bank is the latest financial group to be caught in the battle between a group of bondholders and Argentina that prompted the country’s default this summer and threatens to engulf financial institutions which have until now watched from the sidelines.

Standing before a three-judge panel of the United States Court of Appeals for the Second Circuit, Ms. Wagner argued ... Read More

Argentina joins the Venezuela School of Economics

| September 19th, 2014 | No Comments »
From the Washington Post

By Nick Miroff

One of South America’s largest countries has passed new measures to cap consumer prices of goods, set profit margins for private businesses and levy fines on companies found to be making “artificial or unjustified” profits.

If that sounds like something they would do in Venezuela, well, that’s because they already have.

Now it’s Argentina that wants to use the heavy hand of the state to grip the invisible hand of the market.

After an all-night debate, legislators in Argentina’s lower house voted 130-105 early Thursday for a new “supply law” pushed by President Cristina Fernandez de Kirchner, who is battling inflation, product shortages and a debt crisis her government blames on “vulture” bondholders.

Economy Minister Axel Kicillof said the controls would protect ordinary shoppers against “the innumerable abuses” they suffer at checkout lines. Consumer prices have risen roughly 40 percent since last summer in some parts of the country.

Businesses and farmers in ... Read More

Argentina summons US diplomat over ‘default’ comment

| September 18th, 2014 | No Comments »
Business Insider

Buenos Aires (AFP) – Argentina summoned the acting American ambassador over his comments on its failure to repay debt tied up in a US legal battle, protesting his use of the word “default” and accusing him of trampling on the country’s sovereignty.

Kevin Sullivan, the charge d’affaires and top-ranking diplomat at the US embassy in Buenos Aires, told Argentine newspaper Clarin that it was “important for Argentina to exit default as soon as possible to return to the path of growth and attract the investment it needs.”

That touched a raw nerve in President Cristina Kirchner’s government, which denies it is in default and blames the US for failing to rein in a federal judge who has blocked Argentina from paying its restructured debt until it settles its $1.3 billion dispute with two US hedge funds.

Sullivan’s comments were “incorrect, unfortunate and inappropriate,” cabinet chief Jorge Capitanich told journalists.

“They constitute undue interference in ... Read More

Argentina Warns of ‘Severe Measures’ Over U.S. Diplomat’s Remarks

| September 17th, 2014 | No Comments »
Wall Street Journal WSJ-01

By Taos Turner

BUENOS AIRES–Argentina’s government scolded a U.S. diplomat on Tuesday for remarks he made about the country’s recent default, implying he could be expelled if he makes similar comments again.

Argentine Foreign Minister Héctor Timerman called for a meeting with the U.S. Embassy’s Chargé d’Affaires, Kevin Sullivan, after Mr. Sullivan told the local newspaper Clarin that “it is important for Argentina to emerge from default as soon as possible to return to the path of sustainable economic growth and attract the investment it needs.”

In a statement, Mr. Timerman said he told Mr. Sullivan, a career diplomat who has ... Read More

Willing to Wait 15 Months? There’s Good News: Argentina Credit

| September 16th, 2014 | No Comments »

By Camila Russo and Charlie Devereux

For holders of Argentina’s defaulted bonds who are willing to wait 15 months for the chance to get paid, Mauricio Macri’s surge in presidential polls provides a measure of consolation.

The 55-year-old mayor of Buenos Aires, who said last month Argentina’s refusal to comply with a U.S. court order requiring the nation to settle decade-old unpaid debts held by billionaire Paul Singer would be like “bread today, hunger tomorrow,” has seen his support among voters more than double to 23.2 percent since April, the latest survey results showed. After languishing in third place for much of the year, Macri has now vaulted to a virtual tie with the two leading contenders.

Less than eight weeks after the legal standoff with holdout creditors led to Argentina’s second default in 13 years, voters are throwing their support behind the candidate who’s been the most outspoken about the need for ... Read More

Default Sees Macri Gain on Massa and Scioli in Argentina Poll

| September 15th, 2014 | No Comments »

By Charlie Devereux

Buenos Aires Mayor Mauricio Macri is gaining the most in polls as the fallout from Argentina’s second default in 13 years begins to impinge on candidates with ties to the government ahead of the 2015 presidential election.

A poll by Management & Fit shows 23.2 percent would vote for Macri to become president of South America’s second-biggest economy. That compares with 19.1 percent in a July 23-29 survey, according to the Mar del Plata-based polling firm.

Sergio Massa, former chief of staff of President Cristina Fernandez de Kirchner would get 23.5 percent of the votes, while Buenos Aires province Governor Daniel Scioli still leads with 24.3 percent support. The 2,400-person nationwide survey was taken Sept. 2-9 with a 2 percent margin of error.

Argentina, which defaulted July 30 after a U.S. judge blocked a debt payment until the government settles with holdouts from ... Read More

Argentina’s Congress passes debt restructuring law

| September 11th, 2014 | No Comments »
The Star

BUENOS AIRES: Argentina’s Congress gave final approval on Thursday to a law proposing to restructure the country’s debt to skirt a US court ruling that forced it into its second default in 12 years.

The debt-restructuring plan aims to enable Argentina to make payments on its foreign-held bonds locally or elsewhere beyond the reaches of the US court. It also encourages investors to move their Argentine debt from the US or other foreign jurisdictions to either Argentina or France.

The effectiveness of the law is in question, however, given that US District Judge Thomas Griesa in New York has declared it illegal because it violates his order favouring creditors in a dispute over the country’s default in 2002.

“We don’t expect a significant participation rate, though the government will at least send the signal they want: in their view, they’re doing what they can to ... Read More

Argentina says discusses mechanism of currency swap with China

| September 9th, 2014 | No Comments »
Article originally appeared in Reuters

(Reuters) – Argentina’s central bank chief, Juan Carlos Fabrega, met his Chinese counterpart on Sunday to discuss how a currency swap worth billions of dollars will be put into action, the Argentine monetary authority said.

The swap will allow Argentina to bolster its foreign reserves or pay for Chinese imports with the yuan currency at a time weak export revenues and an ailing currency have put the Latin American nation’s foreign reserves under intense pressure.

The South American country’s La Nacion newspaper reported that the Buenos Aires government would receive a first tranche of yuan worth $1 billion before the end of the year, without saying how it obtained the information.

It would be part of a loan worth a total $11 billion signed by Argentina’s President Cristina Fernandez and her Chinese counterpart in July, shortly before the Latin American nation defaulted on its debt for a second time in 12 years.

Argentina’s latest ... Read More

Argentine drug probe zeroes in on Presidential Palace

| September 8th, 2014 | No Comments »
The Miami Herald

By Joel Keep

A Federal judge in Buenos Aires said that raids could be ordered on the seat of government here, in a drug trafficking investigation that could stain a presidency already battling allegations of corruption.

The case threatens to expose links between presidential staff and organized crime figures suspected of importing precursor chemicals for the manufacture of crystal methamphetamine in Mexico and the United States.

Justice Maria Servini de Cubria issued a writ stating that phone calls had been made between the government’s Military Household and members of presidential staff where authorization was given for importing ephedrine, a crucial component in the manufacture of crystal meth, also known as “ice.”

The judge asserted that drug trafficking rings operating in the country were acting with impunity and with the blessing of politicians and security forces.

“If not, they would have been caught by the police (by now),” ... Read More

Argentina’s Government Is Considering Price Controls

| September 5th, 2014 | No Comments »
Wall Street Journal WSJ-01


BUENOS AIRES—A month after Argentina defaulted on its debt, big companies here say they fear that something else could do much more damage to the economy—legislation letting the government regulate private-sector prices, profit margins and production levels.

On Thursday, Argentina’s senate passed a bill to do just that. The bill is expected to pass the lower house within weeks.

Critics say the bill, informally dubbed the supply law, would bring Argentine regulations in line with those of Venezuela, where inflation hovers around 60% and goods like sugar and toilet paper can be scarce.

Business groups say the legislation would be ruinous for an economy already in recession, with companies curbing production, laying off workers and struggling with inflation thought to be around 40% annually.

“This is absolutely ridiculous. It’s part of a very primitive ideology that says government officials should decide what people should make, how much they should make and how much ... Read More

Miami conference: Better roads to improved ports creates business opportunities in Latin America

| September 4th, 2014 | No Comments »
The Miami Herald

Some 450 government and business leaders from 28 countries have gathered for the two-day Trade Americas & ConnectAmericas Expo — an opportunity to explore ways to bridge Latin America’s infrastructure gap.

But speakers at the conference, which was organized by the Inter-American Development Bank and Latin Trade Group, said that with growing populations — the region is expected to have 700 million people by 2030, more people moving into the middle class and globalization, most countries’ infrastructure is woefully inadequate.

Relatively brisk economic growth in Latin America in recent years also has “revealed the need to improve infrastructure,” said Bernardo Guillamon, the IDB’s manager of outreach and partnerships.

Even ... Read More

Argentine Workers in National Strike as Economic Woes Mount

| August 29th, 2014 | No Comments »

By Charlie Devereux

Argentine labor unions are staging a second national strike in less than five months as July’s bond default threatens to fuel inflation and undermine growth.

Truckers, train conductors, port workers and waiters walked off their jobs today in a 24-hour strike to demand higher wages and in protest at dismissals. While strikers blocked some of the main entrances to Buenos Aires, most bus and metro services worked as normal, according to TV channel TN.

“There’s a great desire to take part and show the government that people are fed up, tired and seeking answers to these demands that haven’t been met,” Hugo Moyano, secretary general of the General Workers Confederation and a former government ally, told reporters yesterday.

President Cristina Fernandez de Kirchner, who has defied a U.S. court order to pay $1.5 billion to holders of defaulted bonds, faces growing social discontent as ... Read More

Argentina’s Low Foreign Reserves Hit Peso

| August 29th, 2014 | No Comments »
Wall Street Journal WSJ-01 By KEN PARKS

BUENOS AIRES—Argentina’s international reserves are starting to dwindle in the wake of the country’s second sovereign-debt default in almost 13 years, putting added stress on the peso and an economy believed to be in recession.

The default has hurt a country already racked by stagflation, the rare but toxic combination of weak economic growth and high inflation. Argentina’s reserves are falling due to capital flight, debt payments and currency-market intervention, spurring fears that the country eventually will run out of the cash it needs to pay creditors and buy imports, a situation that could bring the economy grinding to a halt.

The Argentine peso, traded on a tightly regulated official market, has slipped from 8.20 per dollar before the July 30 default to 8.4010 at Wednesday’s close, its biggest slide since a devaluation of the currency early this year. The decline came even as the central bank’s stockpile ... Read More

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