State debt
Argentina settles with the hedge funds
In the year-long debt dispute between Argentina and US hedge funds, the end is in sight. There is an in-principle agreement, a mediator. But first, the Argentine Parliament, is on the train.
In a dispute the old bond debt of Argentina, has apparently found a compromise with US hedge funds. “For 15 years-running dispute between Argentina and Elliott Management is now well on the way to be solved,” said by competent court-appointed mediator Daniel Pollack on Monday. The parties had signed in last night, an agreement in principle.
The agreement provides for a comparison in the amount of 4.65 billion dollars (4.25 billion Euro), with the Argentina all of the dispute information. This corresponds to around 75 per cent of the originally requested sum. In the conflict, it is a debt of the state broke by the end of 2001, the repayment of which a group of creditors had complained, led by the Elliott-financial Empire of the American billionaire Paul Singer belonging to the New York hedge Fund NML Capital.
The editorial recommends
Argentina offers billion in debt dispute
In the deadlocked dispute between Argentina and several US hedge funds. The new President, Macri offers a billion-dollar repayment. Not yet but have taken all the hurdles. (06.02.2016)
Argentina hopes for a miracle on the economy
Before its official took office, President Mauricio Macri character sets: a Cabinet of bankers and managers he wants to return after twelve years of foreclosure in the country to a free market economy. (07.12.2015)
Don’t cry for me, Argentina
She is boldly critical of capitalism – and probably also corrupt. Cristina Fernández de Kirchner, First Lady of Argentina, then the President, after twelve years. On Sunday her successor is elected.
(24.10.2015)
The fight against the “vulture funds”
NML Capital and Aurelius had bills after the state bankruptcy at the end of 2001 Argentina’s debt cheaply bought, and demanded the par value of the bonds. The US Federal judge Thomas Griesa decided later, that Argentina must first pay the two hedge funds $ 1.3 billion before it is allowed to pay the claims of private creditors.
The dispute caused shock waves in the market with sovereign debt: came The concern that hedge funds could successfully sue for the repayment of the outstanding debt. So it would be more difficult for governments to move their creditors to a voluntary debt, to get back on their feet.
The then left-wing government of President Cristina Kirchner had denied the payment of the sum of strongly and the hedge funds as “vulture funds” insults. This is because, unlike the plaintiff more than 90 percent of the creditors had cut in the years 2005 and 2010, a debt of 70 percent accepted.
The last stage starts
In November, the Conservative Mauricio Macri was elected to Kirchner’s successor. And the’ve changed “immediately” to the course and a solution is sought, said a mediator Pollack.
The 4.65 billion dollars ‘ worth of profit will cost Argentina a considerable part of its foreign exchange reserves. At the same time, it paves Buenos Aires on the way back to the financial markets, in order to take on new debt.
After the principle agreement, the dispute is now in its “last stage”, said a mediator Pollack. The solution needs to be from the Argentine Parliament approved. In addition, a court must allow in New York, Argentina, the access to the international financial market. Within six weeks, this should be achieved, said Pollack.
dk/ml (dpa/afp)