Hedge Funds Dismiss Argentina Payment Offer

Apr 23 2013 | 1:14pm ET

Elliott Management Corp., Aurelius Capital Management and other holdouts from Argentina's 2001 default have rejected the country's latest offer to pay them.

The holdouts blasted the proposal submitted by Argentina to the U.S. Second Circuit Court of Appeals, which is considering whether to force the country to pay the hedge funds and other who have rejected Argentina's previous exchange offers. The country's proposal to the court is similar to the terms it gave those who exchanged debt in 2005 and 2010, roughly 15 cents on the dollar.

"Not only are the details of Argentina's proposal unacceptable and unresponsive; Argentina fails even to provide this court with meaningful 'assurances' that it will actually comply with its own proposal," Theodore Olson, a lawyer for the holdouts, wrote in a Friday brief.

Olson also rejected Argentina's argument that forcing it to pay the holdouts the full $1.47 billion they seek would open it up to legal claims from exchange bondholders, who could seek more than its central bank's reserves. He argued that paying Elliott, Aurelius and the others at par would not be a voluntary offer that would trigger the "rights upon future offers" clause in the 2005 and 2010 bonds.

The holdouts' rejection leaves it to the court to decide. In November, a lower-court judge ordered Argentina to pay them in full and lifted his stay of that decision. The Second Circuit is now considering that stay; at a hearing in February, it seemed inclined to favor the hedge funds. If it does, it could force Argentina to default on its exchange debt.


In Depth

Q&A: Open Season For Closed-End Funds

Aug 29 2014 | 10:00am ET

When Maury Fertig and Bob Huffman, former Salomon Brothers coworkers, launched...

Lifestyle

Och Funds Women In Finance Initiative At U-M

Aug 28 2014 | 3:01pm ET

Och-Ziff Capital founder Daniel Och and his wife have made a "generous donation"...

Guest Contributor

Looking Ahead: What’s In Store For Managed Futures?

Aug 22 2014 | 12:52pm ET

The last five years were phenomenal for investors in equity indices. Will the next...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

July/August 2014 Cover

The time was right

Commodities/Futures magazine launched at the precipice of a revolution in the futures industry—really a revolution in the idea of risk management—that would move it from a small niche industry to ...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.