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Griesa wants to know if the Argentine proposal is "deceptive or improper"
El Cronista
April 16, 2010

He will allow time for the attorneys to explain the new swap to the investors. Then he will rule quickly on the request to impede the opening of the debt swap

EL CRONISTA Buenos Aires

New York Judge Thomas Griesa decided to give a new chance for Argentina to convince the small investors that remain in default to enter the debt swap, before ruling on a request to block and prohibit the opening of the operation in the United States. The decision was taken yesterday afternoon, after convening a hearing on the urgent request of investors that brought a class-action lawsuit against the country.

In the decision taken by the judge, he found in favor of the delays that the Palacio de Hacienda has for formally opening the swap, due to bureaucratic snags that came up, mainly in Italy.

"You have said that it could take two weeks before the swap is held," said the judge from the federal district court of Manhattan during more than an hour of presentation of arguments, according to Reuters news agency.

"There is a chance for the attorneys to communicate to the group, in a way that if the attorneys believe that the swap offer is something deceptive or in some way improper, they can complain about it," he said.

"But I'm not going to make a judicial mandate about that," the judge said.

The attorneys for the plaintiffs, who represent tens of thousands of individual bondholders holding around US$2.2 billion that Argentina owes them, had asked for a hearing with Argentina's lawyers for them to respond to questions about the plan to swap US$20 billion in unpaid debt.

Right after the hearing ended, Economy Minister Amado Boudou made the formal announcement of the launching of the swap in the Palacio de Hacienda, revealing that the proposal will include a cash payment on late interest to small investors.

Boudou would put up to US$160 million at the disposal of this group, a move among bondholders that hold no more than US$50,000 each in nominal bonds in default, corresponding to the late interest since December 31, 2003, as established in the 2005 swap.

"The judge showed himself willing and said that Argentina is working to produce a proposal to solve the problem," was Boudou's interpretation at a press conference.

The bondholders put forth to Griesa that the new swap that Argentina will offer was negotiated by three banks Citibank, Barclays and Deutsche Bank and large investment funds and as such there was no intention of attending to the small bondholders.

Economy's bet is that the judge understands that the offer of cash payment for interest is a sign that the country wants to make the best possible proposal. To manage it, Judge Griesa will not offer obstacles until the swap opens, when Boudou can get the remaining authorities of the regulatory organizations to approve, which the minister estimates to be "no more than 10 days" from now.

Griesa also presides over the lawsuits against the country from the vulture funds NML Capital, of Elliott, and EM of Dart.

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