Argentina’s debt settlement ends 15 years of battle


The announcement of a $ 4.65 billion deal between the Argentine government and four “resilient” hedge funds promises to end a 15-year battle that began when the government defaulted on $ 100 billion. debt in 2001.

Hedge funds have refused to accept a steep haircut in two restructurings over the years, while others have taken 30 cents on the dollar. The deal announced Monday gives the four holdouts – Paul Singer’s NML Capital, Mark Brodsky’s Aurelius Capital Management, Davidson Kempner Capital Management and Bracebridge Capital – 75% of their claims. Two other hedge funds struck an earlier deal for 75 percent of their claims. The agreement is subject to the approval of the Argentine Congress.

Here’s a look at some crucial moments in combat over the years.

October 11, 2012 Mr Singer’s NML Capital has persuaded the government of Ghana to freeze Argentina’s navy training ship, the Libertad, in port until Argentina invests millions of dollars. Months later, a United Nations court ordered Ghana to release the ship and he was allowed to return home.

June 15, 2014 The United States Supreme Court refused to hear the Argentine government’s appeal on court orders to repay debt to U.S. hedge funds. He also voted 7-1 so bondholders could force Argentina to reveal where it owned property in the world.

June 15, 2014 Argentine President Cristina Fernández de Kirchner has said she will refuse to reimburse $ 1.5 billion to “vulture” hedge funds despite a court ruling. She called it extortion and said paying it could result in $ 15 billion in cash payments to other bondholders, which would be half of Argentina’s central bank’s foreign exchange reserves.

September 29, 2014 Manhattan Federal District Court Judge Thomas P. Griesa has declared Argentina in contempt of court, saying it will face repercussions for violating its orders on payments to bondholders .

2014 Graffiti around Argentina’s capital, Buenos Aires, called hedge funds “vultures” and popularized slogans such as “Homeland or vultures” and “Sovereignty or scam of vultures”. Judge Griesa’s caricature appeared in graffiti depicting vultures behind prison bars.

November 22, 2015 Argentina elected Mauricio Macri as its new president, promising free market policies contrary to President Fernandez’s refusal to negotiate with hedge funds. He moved quickly to settle with bondholders, including a $ 1.3 billion deal with Italian investors.

Feb. 19, 2016 Judge Griesa lifted an injunction prohibiting Argentina from raising new money on the bond markets or paying its creditors. The decision depends on two things: Argentina must repeal a law that prevents it from paying recalcitrant hedge funds, and it must make full payments to bondholders who settle by Monday.



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Rosemary S. Bishop