US District Judge Thomas P. Griesa lashed out at the government of Argentina in court today while ISDA vote documents show a unanimous default decision and reveal that Elliott Management participated in the ISDA vote and deliberations.

Argentina Flag

Griesa says Argentina’s actions are “lawless”

Griesa described Argentina’s ignoring US authority as “lawless” and charged the nation with engaging in delivering “half-truths” that “are false and misleading.”

As previously reported in ValueWalk on several occasions, Argentina was not expected to engage in much negotiation on the matter and default was the likely outcome. Despite presenting a public façade they were engaged in serious negotiations, behind the scenes there was little effort to negotiate by putting up what would be considered a serious offer.

“Half-truths are false and misleading,” Griesa said in court. “Half-truths do not comply with the law, which requires disclosure of facts.”

Argentina officials’ desire to compensate only bondholders

Griesa said Argentine officials had spoken of their desire to compensate only bondholders who agreed with the settlement terms “as if that were the end of the story,” ignoring obligations to pay others.  “The republic both in practice and public statements has attempted to ignore that,” he said, describing such behavior as “lawless.”

Griesa ordered the parties to continue negotiating, but these negotiations are expected to bring nothing short of another façade of action with little substance.

For his part, Griesa’s legal decision on the central issue of a bond holder being able to purchase debt after agreement had been reached and then re-negotiating that agreement is expected to receive additional international scrutiny.

While the legal decision remains up in the air, the ISDA voting was rather unanimous.  According to voting records reviewed by ValueWalk and confirmed by an ISDA representative, the default vote was 15-0 with Elliott Management included in the vote. Elliott’s NML Capital was considered among the leaders of the “hedge fund holdouts” who sparked the lawsuit.

On the official question of “Has a Failure to Pay Credit Event occurred with respect to the Argentine Republic?” those voting “Yes” included a who’s who of the big bank derivatives world:

Bank of America N.A.

Barclays Bank plc

BlueMountain Capital Management, LLC

BNP Paribas

Citibank, N.A.

Credit Suisse International

D.E. Shaw & Co., L.P.

Deutsche Bank AG

Eaton Vance Management

Elliott Management Corporation

Goldman Sachs International

JPMorgan Chase Bank, N.A.

Morgan Stanley & Co. International plc

Nomura International plc

Pacific Investment Management Co., LLC

The ISDA has confirmed the authenticity of the document obtained by ValueWalk, which is embedded below.

Isda on Argentina