Like a messy divorce, the tit-for-tat battle that is Argentina’s bond debt just keeps getting uglier with each passing day.
Argentina bared Bank of New York Mellon
Argentina said on Tuesday it has barred The Bank of New York Mellon Corporation (NYSE:BK) from operating in the country, an apparent move against the bank that, following orders from a US court, had blocked the Argentine government debt payment. Wednesday Argentina’s Congress is set to consider a law that would replace BNY Mellon as the intermediary for foreign bond payments, instead using the state-controlled Banco Nacion.
A Reuters report notes that the BNY Mellon, as the intermediary between Argentina and bond holders, was replaced because Argentina claims it did not fulfill technical requirements to operate in the country. The apparent target of Argentina’s ire is that BNY Mellon in June obeyed a U.S. court ruling that required the bank to block a $539 million interest payment on debt to Argentina’s bond holders.
The Bank of New York Mellon Corporation (NYSE:BK) is caught up in a messy and sometimes emotion filled battle that, like a divorce fight, sometimes makes little sense and defies logic. This weekend, for instance, Argentine President Christina Fernandez de Kirchner, while blasting Chicago-based RR Donnelley & Sons Co (NASDAQ:RRD) for closing a plant in the country, saying the act might fall under the country’s new terrorism law, held up an odd picture as her emotion-filled voice denounced the printing company.
Sam Zell had no connection with RR Donnelley or Argentina
Recorded on a YouTube video, the picture was of Chicago billionaire Sam Zell. The problem, according to a report in the Chicago Tribune, was that Zell had no connection to the printing company or the Argentine situation whatsoever.
“It just makes her look even stupider,” an amused Zell was quoted as saying last Friday. “It didn’t bother me one iota.” Zell confirmed that was aware of no investments in Argentina.
As previously reported in ValueWalk, Kirchner labeled RR Donnelley & Sons Co (NASDAQ:RRD) a “terrorist” after the firm shut down a plant in the Latin American country. The Argentine government claimed the plant closing was taken as a coordinated effort to retaliate against Argentina after its legal challenges in the US court.
For its part, RR Donnelley said in a statement that it closed the plant, which employed 400 workers, because it was unprofitable and the decision had nothing to do with Argentina’s bond issues.