Argentina says Ciao Default, paying holdouts after 14 years. [View all]

[forest444]

Last edited Fri Apr 22, 2016, 06:19 PM - Edit history (1)

Source: Reuters

Argentina paid holdout bondholders on Friday who had refused debt restructurings after a record 2002 default, closing the book on nearly a decade of messy litigation as new President Mauricio Macri embraces global financial markets.

U.S. District Judge Thomas Griesa in Manhattan confirmed the payments and issued an order allowing Argentina to resume servicing its renegotiated bonds, lifting an injunction that had blocked payment to most of Argentina's bondholders since 2014.

The injunction against paying restructured debt was one of many hardball tactics that Griesa authorized against Macri's predecessor, leftist President Cristina Fernández de Kirchner, who denounced the hard-line holdouts as "vulture funds." Those funds, led by London-based Aurelius Capital Management and Paul Singer's Cayman Islands-based NML Capital Ltd, were among hedge funds that received more than $6 billion in settlements on Friday, according to court documents. Argentina also set aside about $3 billion in escrow to cover holdouts that had not settled by Feb. 29.

Payments on bonds restructured in 2005 and 2010 (92%) - the ones blocked in 2014 by Griesa - should resume in the next few weeks, officials led by Finance Minister Alfonso Prat-Gay told investors last week during a road show for Argentina's first global bond sale in 15 years. Argentina sold $16.5 billion of sovereign debt this week, the biggest bond sale ever from an emerging market and the country's first global issue in 15 years. The deal raised funds to pay today's settlements and potentially paved the way for Argentine corporate borrowers.

Read more: http://www.reuters.com/article/us-argentina-debt-idUSKCN0XJ1OO

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According to Joseph Stiglitz, this gives TARP baby Paul Singer an 1,180% payout. He bought $48 million in old Argentine bonds in 2008 from a reseller, and stocked up on another $129 million just last year to pass himself off as a "me too" bondholder; his take: $2.25 billion (all going to the Caymans).

Nice work if you can get it.

This payout (and Greasa's rulings) in effect endorses this kind of scam, guaranteeing it will happen again in the future - possibly to U.S. bonds, if Congressional Republicans trigger a default sometime in the next few years.