fabriziof
Forumer storico
a 46,5
Titoli di Stato area non Euro ARGENTINA obbligazioni e tango bond (12 lettori)
- Creatore Discussione SINIBALDO
- Data di Inizio
a 46,5
iguanito
Forumer storico
Hai l'isin?
fabriziof
Forumer storico
Usn96616aa00
dagoweb
Forumer attivo
*Telam*
*Bondholders formalize an “ad hoc” group to launch an offer of private swap
with the vulture funds*
Thursday, November 07, 2013
By Mara Laudonia
A handful of large investment funds that participated in the Argentine debt
restructuring in 2005 and 2010 (“the swap bondholders”) will next week
formalize the launch of the “Ad Hoc Creditors Group” that will offer the
vulture funds and Argentina’s holdouts a negotiation of a debt swap among
private parties.
Telam confirmed this from the funds leading the negotiations – they are in
the United States and Europe – who clarified it is a “private initiative”
in which the Argentine government finds itself on the margin of the
negotiation.
This “ad hoc” group, which in large part is funds that make up the Exchange
Bondholder Group (EBG) which filed an “amicus” brief in favor of Argentina
before U.S. court in the lawsuit that it has against the vulture funds,
indicate that “we will count legal advice and an underwriting bank” and
will put into motion a private “marketing campaign” to reach “the whole
universe of creditors,” swap bondholders and holdouts.
That “universe of creditors” that they plan to reach involves US$6.5
billion in nominal Argentine debt which remains in default.
The initiative came together as part of the existing scenario in U.S.
court, which holds as a kind of hostage the bondholders that entered the
2005 and 2010 swaps, since they see their collection in danger on Argentine
sovereign bonds via New York.
To this is added the scarce interest in participating in a potential swap
for local warrants if the case is complicated before the U.S. Supreme
Court, and the irruption of rulings in Europe in favor of shared
“responsibilities” over the debt crisis between private holders and
Argentina.
They also take into account the hard position argued by Argentina to not
pay the vulture funds more than the rest; the increasing pressure from the
IMF to halt the holdouts, and the confession of the Elliott fund –
reflected in an article in the Financial Times – that it’s ready to
“negotiate.”
All of that served as an alarm for a solution to come together that was
once thought to be “a blunder”, said sources to Telam.
The “private swap” proposal is known on the market as the “Gramercy
solution” – since it came out that this fund is one of the promoters of the
initiative – and consists of offering a debt swap to the holdouts, where
they resign their position of wanting to collect 100% in the international
courts and accept negotiating a haircut with private parties (less than
what the government offers).
That “gain” that the holdouts would obtain between what Argentina offers
them and what the holders offer – which are part of the 93% that entered
the swaps – will be paid by the bondholders themselves, who will resign
this way part of the payment received for interest on restructured bonds.
For these negotiations to success and once the vulture funds and holdouts
give up their bonds in default and give them to the bondholders pushing
this initiative, the latter would go knock on the door of the government to
put together a new swap, this time with Argentina, and end with the default
in this way.
This in the view that Argentina already promulgated the Law of the
Reopening of the Debt Swap and lifted the Lock Law in October, and since
the new restructuring process would contain the same conditions as in 2010,
it would not mean any additional cost for the country.
This “initial loss” by the bondholders would be more than compensated for
with the future rises in bond prices.
In the “base” scenario it is calculated that giving up 20% in interest (it
would be assumed as a “tax” of 7 dollars per coupon payment), they would
obtain a future yield of 24%, since Argentina would end with the default
and would go back to financing at single-digit rates and bond prices would
improve according to the lines of the proposal that will be presented next
week, which Telam had access to.
These returns could ascend to 67% if one calculates the most complicated
scenario (meltdown) when the Supreme Court definitively rejects the
Argentine appeal, and there is a “technical default” if it cannot pay via
New York.
This discount is calculated based on the present value of the income from
interest on debt to bondholders collected from 2014 to 2018, which at
today's value is around US$ 6.7 billion (values will rise or fall,
depending on the negotiation).
So a 20% discount of this amount would reach US$1.4 billion dollars, which
is paid out to "compensate" the vulture funds and the rest of the holdouts.
In the hypothetical scenario, the vulture funds - like Paul Singer - will
receive about US$ 1 billion in compensation from the bondholders, while the
rest of the holdouts will receive an estimated US$400 million
The promoters of the initiative recognize that it is "ambitious" from the
point of view that requires three strong conditions: on the one hand to
manage to attract the holdouts, who so far have remained outside the
exchanges proposed by the country and went the way of litigation; to
attract a supermajority of the bondholders from the swap, who must resign a
portion of interest, betting to receive future profitability; and finally
to ensure a wide participation of both parties.
The so-called "Ad Hoc Group" members recognize that their instrumentation
will need time due to the complexity of the operation and the scarce
precedent that exists in these types of negotiations.
A hope for the acceptance rate is that of the US$6.5 billion nominal
dollars in default, only some 450 million correspond to the ruling from the
"trial of the century", the 'pari passu' (the ruling of Judge Thomas
Griesa is US$1.35 billion, because it includes unpaid accrued interest).
[*NOTE: The above Telam piece was also run on Ambito.com
<http://Ambito.com> and InfoBAE*)
*Bondholders formalize an “ad hoc” group to launch an offer of private swap
with the vulture funds*
Thursday, November 07, 2013
By Mara Laudonia
A handful of large investment funds that participated in the Argentine debt
restructuring in 2005 and 2010 (“the swap bondholders”) will next week
formalize the launch of the “Ad Hoc Creditors Group” that will offer the
vulture funds and Argentina’s holdouts a negotiation of a debt swap among
private parties.
Telam confirmed this from the funds leading the negotiations – they are in
the United States and Europe – who clarified it is a “private initiative”
in which the Argentine government finds itself on the margin of the
negotiation.
This “ad hoc” group, which in large part is funds that make up the Exchange
Bondholder Group (EBG) which filed an “amicus” brief in favor of Argentina
before U.S. court in the lawsuit that it has against the vulture funds,
indicate that “we will count legal advice and an underwriting bank” and
will put into motion a private “marketing campaign” to reach “the whole
universe of creditors,” swap bondholders and holdouts.
That “universe of creditors” that they plan to reach involves US$6.5
billion in nominal Argentine debt which remains in default.
The initiative came together as part of the existing scenario in U.S.
court, which holds as a kind of hostage the bondholders that entered the
2005 and 2010 swaps, since they see their collection in danger on Argentine
sovereign bonds via New York.
To this is added the scarce interest in participating in a potential swap
for local warrants if the case is complicated before the U.S. Supreme
Court, and the irruption of rulings in Europe in favor of shared
“responsibilities” over the debt crisis between private holders and
Argentina.
They also take into account the hard position argued by Argentina to not
pay the vulture funds more than the rest; the increasing pressure from the
IMF to halt the holdouts, and the confession of the Elliott fund –
reflected in an article in the Financial Times – that it’s ready to
“negotiate.”
All of that served as an alarm for a solution to come together that was
once thought to be “a blunder”, said sources to Telam.
The “private swap” proposal is known on the market as the “Gramercy
solution” – since it came out that this fund is one of the promoters of the
initiative – and consists of offering a debt swap to the holdouts, where
they resign their position of wanting to collect 100% in the international
courts and accept negotiating a haircut with private parties (less than
what the government offers).
That “gain” that the holdouts would obtain between what Argentina offers
them and what the holders offer – which are part of the 93% that entered
the swaps – will be paid by the bondholders themselves, who will resign
this way part of the payment received for interest on restructured bonds.
For these negotiations to success and once the vulture funds and holdouts
give up their bonds in default and give them to the bondholders pushing
this initiative, the latter would go knock on the door of the government to
put together a new swap, this time with Argentina, and end with the default
in this way.
This in the view that Argentina already promulgated the Law of the
Reopening of the Debt Swap and lifted the Lock Law in October, and since
the new restructuring process would contain the same conditions as in 2010,
it would not mean any additional cost for the country.
This “initial loss” by the bondholders would be more than compensated for
with the future rises in bond prices.
In the “base” scenario it is calculated that giving up 20% in interest (it
would be assumed as a “tax” of 7 dollars per coupon payment), they would
obtain a future yield of 24%, since Argentina would end with the default
and would go back to financing at single-digit rates and bond prices would
improve according to the lines of the proposal that will be presented next
week, which Telam had access to.
These returns could ascend to 67% if one calculates the most complicated
scenario (meltdown) when the Supreme Court definitively rejects the
Argentine appeal, and there is a “technical default” if it cannot pay via
New York.
This discount is calculated based on the present value of the income from
interest on debt to bondholders collected from 2014 to 2018, which at
today's value is around US$ 6.7 billion (values will rise or fall,
depending on the negotiation).
So a 20% discount of this amount would reach US$1.4 billion dollars, which
is paid out to "compensate" the vulture funds and the rest of the holdouts.
In the hypothetical scenario, the vulture funds - like Paul Singer - will
receive about US$ 1 billion in compensation from the bondholders, while the
rest of the holdouts will receive an estimated US$400 million
The promoters of the initiative recognize that it is "ambitious" from the
point of view that requires three strong conditions: on the one hand to
manage to attract the holdouts, who so far have remained outside the
exchanges proposed by the country and went the way of litigation; to
attract a supermajority of the bondholders from the swap, who must resign a
portion of interest, betting to receive future profitability; and finally
to ensure a wide participation of both parties.
The so-called "Ad Hoc Group" members recognize that their instrumentation
will need time due to the complexity of the operation and the scarce
precedent that exists in these types of negotiations.
A hope for the acceptance rate is that of the US$6.5 billion nominal
dollars in default, only some 450 million correspond to the ruling from the
"trial of the century", the 'pari passu' (the ruling of Judge Thomas
Griesa is US$1.35 billion, because it includes unpaid accrued interest).
[*NOTE: The above Telam piece was also run on Ambito.com
<http://Ambito.com> and InfoBAE*)
capt.harlock
MENA IL CAMMELLO FAN CLUB
fabriziof
Forumer storico
Quali hai preso?