Holdouts Accept Argentine Defaulted Debt Settlements by Feb. 29, 2016

Summary: Four holdout hedge fund groups are accepting $4.65 billion in Argentine defaulted debt settlements before Court-imposed deadlines of Feb. 29, 2016.

Four holdout hedge fund groups and the Republic of Argentina have met a U.S. District Court-imposed deadline for reaching an agreement: New York Times World @nytimesworld, via Twitter Feb. 29, 2016

The Argentine Republic's central government and four holdout hedge fund groups are in agreement over Argentine defaulted debt settlements in time for a United States District Court-imposed deadline of Feb. 29, 2016.

The agreement brings the four holdouts, described as such for resisting two previous restructuring offers, in 2005 and in 2010, that much closer to getting paid. The deal calls upon the federal government of the Argentine Republic to pay $4.65 billion to Aurelius, Bracebridge Capital, Davidson Kempner and NML Capital Limited. The settlement demands that the national government in Buenos Aires pay the four holdouts in full no later than the deadline date of April 14, 2016.

Argentina expects to raise $15 billion through bond sales during March and April in international money markets, whose access Argentina defaulted debt settlements make possible.

The accepted agreement, the bond sales and the full payment fit into a schedule whose specifics are elaborated in a court ruling issued Feb. 19, 2016.

The ruling by Judge Thomas Poole Griesa of the United States District Court for the Southern District of New York (Manhattan) guides Argentina toward economic recovery. Argentine defaulted debt settlements have three conditions that must be met, from meeting with and paying in full bondholding creditors to revoking laws hostile to bondholders. The first condition is fulfilled through friendly settlement talks with investors in sovereign debt even though Argentina does not have the money to pay the claimants.

Representatives join in stating that the four holdout hedge fund groups will not oppose Argentine efforts to raise money through bond sales in international money markets.

Argentine defaulted debt settlements keep Argentina away from international financial institutions and out of international money markets until laws that deny sovereign debtholders payment are revoked.

Access to international financial institutions and to international money markets leapfrog Argentina over the law-rescinding stage that must precede discussions and payments into a court-proscribed stage. An injunction issued Feb. 23, 2012, by Judge Griesa mandates the equal payment of no one investor in defaulted debt before payments to all debt investors. The injunction, whose dropping is proposed by the issuing judge, needs the approval of the United States Court of Appeals for the Circuit in New York.

Adherence to proper sequences of events offers narrow windows of opportunity since Sergio Berensztein, Argentine political analyst, predicts that law-rescinding debates will take most of March.

The conclusion of talks, the promise of payments and the re-entry into markets provokes initial enthusiasm and positive remarks from Argentina, the court and the holdouts.

Alfonso Prat-Gay, minister of the economy in the Macri presidency since Dec. 10, 2015, qualifies settlements as “Argentina is joining the world in an intelligent way.” He reveals that, consequently, “For the first time in 15 years [since Dec. 23, 2001], we can say that Argentina has really started to exit default.”

Daniel A. Pollock, court-appointed mediator from McCarter & English’s offices in New York City, states that “This is a giant step forward in this long-running litigation.”

A spokesman tells reporters that Elliott Management Corporation, under two percent of whose $26 billion assets NML represents, is “pleased to have reached an agreement.”

(left) Alfonso Prat-Gay, Argentine economist and President Macri's ministro de Hacienda y Finanzas (Minister of Argentina's Treasury and Public Finances), and (right) Luis Caputo, President Macri's secretario de Finanzas (Secretary of Finances), seek resolution of Argentina's sovereign debt; image Thursday, Sep. 19, 2013, 21:53: Casa Rosada (Argentina Presidency of the Nation), CC BY 2.5 Argentina, via Wikimedia Commons

Acknowledgment

My special thanks to talented artists and photographers/concerned organizations who make their fine images available on the internet.

Image credits:

Four holdout hedge fund groups and the Republic of Argentina have met a U.S. District Court-imposed deadline for reaching an agreement: New York Times World @nytimesworld, via Twitter Feb. 29, 2016, @ https://twitter.com/nytimesworld/status/704337062804250624

(left) Alfonso Prat-Gay, Argentine economist and President Macri's ministro de Hacienda y Finanzas (Minister of Argentina's Treasury and Public Finances), and (right) Luis Caputo, President Macri's secretario de Finanzas (Secretary of Finances), seek resolution of Argentina's sovereign debt; image Thursday, Sep. 19, 2013, 21:53: Casa Rosada (Argentina Presidency of the Nation), CC BY 2.5 Argentina, via Wikimedia Commons @ https://commons.wikimedia.org/wiki/File:Alfonso_Prat_Gay_y_Luis_Caputo.jpg

For further information:

euronews (in English). 29 February 2016. "Argentina strikes deal with US 'holdout' creditors." YouTube.
Available @ https://www.youtube.com/watch?v=S3OayKmOimo

Marriner, Derdriu. 11 December 2015. "Argentine President Mauricio Macri Wins Presidential Office and Palace." Earth and Space News. Friday.
Available @ https://earth-and-space-news.blogspot.com/2015/12/argentine-president-mauricio-macri-wins.html

Marriner, Derdriu. 19 February 2016. "Three Conditions to Lifting Argentine Defaulted Debt Injunction." Earth and Space News. Friday.
Available @ https://earth-and-space-news.blogspot.com/2016/02/three-conditions-to-lifting-argentine.html

New York Times World @nytimesworld. 29 February 2016. "Argentina Reaches Deal With Hedge Funds Over Debt." Twitter.
Available @ https://twitter.com/nytimesworld/status/704337062804250624

Stevenson, Alexandra; and Gilbert, Jonathan. 29 February 2016. “Argentina Reaches Deal with Hedge Funds over Debt.” The New York Times > Business > DealBook.
Available @ http://www.nytimes.com/2016/03/01/business/dealbook/argentina-reaches-deal-with-hedge-funds-over-debt.html?_r=0