Argentina Moves To Skirt Default Ruling

Aug 27 2013 | 10:46am ET

Argentina remained defiant in the face of another adverse U.S. court ruling in its battle to avoid paying hedge-fund holdouts from its 2001 default.

The country again vowed never to pay the $1.33 billion ordered by the U.S. Second Circuit Court of Appeals even if it loses before the U.S. Supreme Court. And it moved to avoid another default in that event.

Argentine President Cristina Kirchner rejected the Second Circuit’s branding of her country as a “uniquely recalcitrant debtor,” calling her government “a serial payer but not a serial debtor.” She called Friday’s ruling “a bit unfair to Argentina.”

And while she’s pledged to ignore its ruling one way or the other, Kirchner appealed to the Supreme Court to do what lower courts have refused to do: allow it to continue paying creditors who accepted its debt exchanges—and a huge haircut—in 2005 and 2010 while it still refuses to pay the holdouts. Some 93% of the defaulted debtholders took the deal.

“The decision of the U.S. Supreme Court will affect not only Argentina but the entire financial world,” she said.

Meanwhile, Argentina took steps to render moot the Second Circuit’s finding that it waived its sovereign immunity when it “promised to submit herself under the United States jurisdiction, sticking to New York’s laws.” The country has reopened its 2005 debt swap, offering creditors the chance to exchange their U.S.-law bonds for those issued under Argentine law. Those holding Argentine-law bonds would be unaffected by any default on U.S.-law bonds if the Supreme Court upholds the order for the country to pay the holdouts, led by Elliott Associates, and Argentina decides to default.

“This shows our profound commitment to paying our debt to bondholders,” Kirchner said during a televised address.


In Depth

JOBS Act Propels Real-Estate Crowdfunding Platform

Oct 21 2014 | 2:57am ET

If D.J. Paul were a real estate development, he would be described as “multi-use...

Lifestyle

Strippers Accused Of Robbing Hedge-Fund Manager Face Jail

Oct 20 2014 | 9:20am ET

A group of alleged stripper-thieves—whose victims include a hedge-fund manager...

Guest Contributor

PAAMCO: European Equity Exposure - Challenging Year, But All is Not Lost

Oct 16 2014 | 4:12am ET

European equity hedge fund managers have had a tough time so far this year. The...

 

Videos

Editor's Note

    Must Attend Hedge Fund Charity Events For October

    Sep 30 2014 | 9:29am ET

    The crisp Autumnal days of October are upon us, and so are a few of the hedge fund industry’s favorite charitable events. If you have never been to Rocktoberfest, well, you are missing out. And for a quieter evening of sipping and socializing, stop by HFC’s Wine Soiree. Read more…

 

Futures Magazine

October 2014 Cover

Deeply flawed risk benchmark

Most traders agree that proper risk management is the key to successful trading. However, many traders depend on the deeply flawed measure of standard deviation as a benchmark of risk. Here we put it ...

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.