After the US Supreme Court ruled against it, Argentina has publicly expressed a willingness to negotiate with creditors, just at a time of its choosing.
Argentina’s Axel Kicillof eager to chat with Paul Singer
As the New York Times notes, the Argentine Economy Minister Axel Kicillof says he is eager to chat with Paul Singer and other creditors but just can’t seem to find the time to do it while he was in New York recently. Busy schedule and all, meeting with their law firm Cleary Gottlieb, which is just a short cab ride from Singer’s office.
In a speech to ambassadors of the Group of 77 countries and China, the Wall Street Journal quoted Kicillof as saying Argentina is prepared to negotiate “in good faith” with the holdout creditors over the nation’s defaulted debt, although he appeared to imply that Argentina won’t negotiate until it is granted extra time by the courts, the report said.
“What we’re asking is we not just have three days and run the risk of defaulting,” Mr. Kicillof was quoted as saying yesterday. If they were not granted the additional time “it will not be possible in such a short time to bear in mind all factors and risks involved in any decision made by Argentina.” The article notes Kicillof declined to reveal if Argentina would compromise with holdouts, but said the country is “willing to evaluate all options bearing in mind legal obligations.”
Argentina’s $500 million interest payments
Kicillof’s United Nations speech in New York comes as Argentina is facing interest payments of more than $500 million June 30. Problem is, Argentina can’t pay holders of those bonds it reached settlement with unless it also pays the holdouts, according to an order from U.S. Judge Thomas Griesa. Miss the June 30 deadline and the Latin American nation will trigger a technical default even though it has a 30-day grace period to make the payment.
A key issue with the technical default is that it could trigger credit default SWAPs insurance contracts underwritten in the event of default. Lawyers representing the holder of Argentine credit default swaps had written to ISDA last Friday if failure to make the debt payments this month would trigger a clause in the contract that would allow it to cover that potential default, the Wall Street Journal article noted. “ISDA determines whether defaults or other events that trigger insurance-type payouts have occurred, had until 5pm New York time Tuesday to decide whether to accept the question. Its website Wednesday notes that the question has been rejected,” the report said.