Saturday, March 30, 2013
Argentine defiance in appeal of $1.4 billion debt ruling aims at unlikely Supreme Court win
By Michael Warren, The Associated Press | The Canadian Press
BUENOS AIRES, Argentina - With just hours to go before Argentina has to show its last cards in a billion-dollar debt showdown in the U.S. courts, President Cristina Fernandez seems to be keeping up her "we're going for more" motto. Her government is reportedly preparing a response that analysts say could lead the country into another catastrophic default.
Argentina has until midnight Friday to propose how it would satisfy a $1.4 billion judgment won by plaintiffs who have insisted for a decade on getting full payment in cash, plus interest and penalties, on sovereign debt that the country hasn't paid since its world-record default in 2002.
Government officials weren't talking in public about the plan this week, but they have repeatedly said that the plaintiffs it considers "vulture funds" should get no better than what 92 per cent of other investors in Argentina accepted in 2005 and 2010 in exchange for their defaulted bonds: a package of new bonds that were initially worth less than 30 cents on the dollar.
The exact details likely won't be known until just before the deadline, but the broader aspects have been widely reported in Argentina's media: Rather than the quick cash payout ordered by the courts, it will offer new bonds that won't come fully due for up to 25 years. And rather than pay in full, the government will insist on paying no more than 30 per cent to start with.