Argentina wants to pay debt in Buenos Aires and clashes with opposition

Argentina will attempt to move to Buenos Aires to pay its sovereign debt to 100% of creditors, including hedge funds who litigated against the United States and oppose this initiative that qualify as illegal.

The bill was sent to Congress where the government has a majority. The government seeks to demonstrate willingness to pay and rejecting the moratorium (default) the impossibility of honoring its debt in the window engaged in swap arrangements with creditors, the Bank of New York (BoNY).

“The change of venue payment is for Argentina to continue paying bondholders and charging,” said Economy Minister Kicillof Axcel, at a press conference, explaining why the approval of the Parliament intends to take power agent BoNY payment to an account and replace it with a state bank in Buenos Aires.

The measure, which would not force bondholders, reopen the exchange and provides deposit payments into a new account in the Argentina capital. Try to cover 93% of bondholders who joined swaps in 2005 and 2010 and even the 7% refused.

The hedge fund Aurelius rejected this plan considering that the Argentine authorities “decided to fall into illegality” with this proposal.

The last deposit in July $ 539 million on behalf of holders of restructured bonds was blocked in BoNY by court order from south of New York, Thomas Griesa district that Argentina breached a ruling that forces her to pay to hedge funds the 100% of a debt of 1,330 million.

Because these creditors could not collect 30 July in the BoNY two rating agencies put the country in to category of “selective default”.

Having served the sentence, Argentina could have faced trials millionaires holders of restructured bonds.

“The ruling is unenforceable Griesa.’s Debt is manageable now, is going to become one of between 150,000 and 500,000 million dollars” if the statement is true, the minister said.

The explanation of such amount is a clause in the contract according to which the exchange offer if a creditor is improved, the rest should be treated equally.

Kicillof clarified that “each bondholder can search and apply for another venue fee, another solution” to lock in New York.

Rejection and fearful opponent Marketplace

After the Buenos Aires Stock Exchange opened the day down 1.1% with their leader FTSE index closed with a marginal increase of 0.97% to 8929.57 points.

Meanwhile, the high demand for tickets to the American market marginal shot the dollar to 13.55 pesos (13.15 on Tuesday) and the official Square depreciated 0.45% to close at 8.32 pesos per dollar.

One of the bosses and the rightist opposition presidential candidate, Mauricio Macri, mayor of the capital, announced that his bloc would vote against the project, while the second legislative force, the Union Civica Radical Social Democrat, had not yet been pronounced.

Kicillof insisted that “there (is) a change of venue.”

But economist Nicholas Dujovne, director of the eponymous consultancy, yes it is. “It’s a change of venue” and “the situation is not getting worse” scenario for its low success.

In any event, Dujovne, this project is unattractive to a majority of the bondholders.

Vote before September 30
The government has a majority in Congress and the law requires that before September 30 approved another payment when due debt by $ 200 million.

“The 7% can come and change those bonds and if you do you will get a 300% profit. Bit to Is Mr. (President of NML, Paul) Singer Yes, because vulture and therefore does not want to negotiate, but you will pay “launched Kicillof. Argentina calls “vulture” funds that bought defaulted debt.

The payments, according to the official proposal, would under the same conditions of the swap, which fixed reductions in principal between 45 and 75%.

“This is probably the right decision. This may be the solution,” he told Radio Vorterix Zembo Tulio, representative of the Italian bondholders.

In the midst of a brutal economic and institutional crisis, Argentina declared in 2001, the largest contemporary default by almost 100,000 million, including interest.