Argentina wins big victory to end 15 years in default
Argentina is coming back to world markets after being shut out for 15 years.
And it's gearing up for one of the biggest bond sales ever for a developing country.
On Wednesday, the U.S. Court of Appeals upheld an earlier decision that allows Argentina to issue bonds and payoff its creditors it has owed since the country defaulted in 2001.
The ruling is a major victory for Argentina, which slugged through a legal debt battle with American hedge funds known as "vultures" in Latin America.
http://money.cnn.com/2016/04/13/news/economy/argentina-ends-default-15-years/index.html
This sounds like a positive development for Argentina.
= new reply since forum marked as read
For starters, Argentina emerged from default in January 2005 - 11 years ago already.
Kirchner arranged a bond swap that was accepted by 75% of affected bondholders; and while they did have to accept a two-thirds haircut at the time, the high yields (around 9%) and increase in Argentine bond values meant that those who've held on to them have made a profit of around 40%. A second bond swap in 2010 raised the percentage of normalized bondholders to 92%, and the only bondholders left out at that point were those holding out of their own volition (i.e. in bad faith).
The "default" refers to Singer's pet judge, Greasa, and his slapping an illegal hold on the actual payments in 2014 - a little like having a crooked local judge put a hold on your mortgage payment in hopes you'll give up your land (to the criminal bribing him to do so).
As for the benefits, that remains to be seen. This means $12.5 billion in extra debt, at 9% interest (which of course actually means $20 billion or more). In the past (the dictatorship; Menem) such borrowing only led to vicious circles, with little if anything to show in return. Nor does this guarantee closure, since many legitimate bondholders will probably sue for equal terms as Singer and the other holdouts (i.e. around 7 times more than their own).
Contrary to the article's assertion (which only parrots Macri talking points) the additional $6 billion or so will be used not for "infrastructure" (which Macri's been cutting) but to cover the budget deficit Macri promised that his tax cuts to the rich would magically eliminate.
Now, where have we heard that one before?
Nevertheless, thanks for posting.