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Accelerating the presentation before U.S. courts to ratify the end of the default
El Cronista
September 08, 2010

By Juan Cerruti

Once the formal aspect of the swap closed, the Economy Ministry has a green light to try to get a pronouncement from Griesa. They are seeking this way to deactivate new embargo attempts

Official sources confirmed that the delivery of the new bonds that came out of the recent swap of debt in default will be completed finally this Friday. The process was delayed by the large quantity of small bondholders that had to be identified at the time of making the trade of bonds swapped for paper in default.

With the way cleared and the paperwork of the swap closed, the government plans now to focus itself on the presentation that is being put together to send to the U.S. courts, but precisely to Judge Thomas Griesa, who is presiding over the lawsuits against Argentina in New York.

For that, a special working group was set up, which is made up of lawyers from the Economy Ministry, officials from the Solicitor General's office at the Treasury, and specialists from the New York law firm of Cleary, Gottlieb, Steen & Hamilton, which is advising the Argentine government.

"First we want to complete the delivery of the new bonds. Now we are working on the various strategies and legal avenues to reach the judges in the United States. There are various possibilities and we are opting for one of them. Certainly in the course of the coming weeks there is going to be news on this," said a source at the Palacio de Hacienda.

The intention of the government is to get an explicit pronouncement from Griesa in favor of Argentina having exited the default. The official argument has its roots in the number reached among the debt swaps (the recent one and the one in 2005): 92% of the total in cessation of payments. They say that the remaining amount, 4% are residuals and another 4% is the amount in the hands of the vulture funds, that by definition don't accept partial offers as their business rests precisely in buying at junk rates to gain a difference through managing to toss up some embargo and negotiate with the countries, to collect 100% in the judicial track. Ergo, at the Economy Ministry they think that Argentina already has no more creditors in default. And for that they've shown their good faith.

In the interim, they will continue sounding out the markets to find "a window" that allows them to place a bond abroad for around US$1 billion. There was an opportunity, 20 days ago, with an interest rate of one digit as the government planned. Then the international financial climate deteriorated and now they will have to wait to see how the markets evolve in order to evaluate an attempt.

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