05/22/2020 - 18:00
The New York markets closed and the dollars did not reach the hands of the bondholders . Therefore Argentina is already formally in default. Once again. It is because the 503 million dollars corresponding to interest coupons of three global bonds -one that matures in 2021, another in 2026 and another in 2046- that were issued on April 22, 2016, were not paid in a timely manner. first months of the Mauricio Macri government.
Paradoxes Those bonds represented a mega-debt issue of $ 16 billion . Of that amount, 9,400 million went right to the account of the vulture funds that were litigating against Argentina for the default of 2002.
These investors had not accepted the exchange proposals that were made in 2005 and 2010 and opted for the judicial route. They ended up winning in the New York court led by Thomas Griesa and in the successive appeals that even went to the United States Supreme Court.
So today it is going into default with bonds that were issued to get out of another default. It must be difficult to find an equal antecedent in the history of world finance.
The important thing about this default 2020 model is that it occurs in the midst of a negotiation with the bondholders who have Argentine debt securities issued in foreign currency and under New York or London legislation.
The fact that you are in the middle of a negotiation that includes bonds for 66,000 million dollars is that the default that occurred today probably does not lead to a lawsuit. Not now, immediately. And it is because the bondholders are trusting that they will reach a global settlement with Argentina.
There are signs: the main one, that the Minister of the Economy, Martín Guzmán, announced today that he is willing to improve the original offer that the country presented weeks ago, and that it was formally rejected by more than 80% of the bondholders.
The speculation is that there will be smoking, although the government must postpone the negotiation even once more, after the new extension that expires on June 8.
Perhaps the final date, the limit that should not be crossed, is July 30. That day the extension would expire for the payment date of June 30, when the interest on the Discount bonds issued in the 2005 swap must be paid. There are 572 million dollars that must go to the bondholders who entered that swap and who do not They are willing to wait longer to collect.
Additional information, now that the block of senators of the Front of All wants to inquire about the origin of the debt . This debt issuance, like all those made since the return to democracy in 1983, were carried out with the agreement of Congress.
It happens that the debt to be issued is included in the budget laws of each year, and they are voted by Congress. From 1983 to here, the justicialismo in its different forms dominated the Senate -always- and was majority or first minority in Deputies .
Even the commissions that were paid to the advisory or placement banks were communicated even before the issue of each bond.
Everything was done in plain sight and with the agreement of Justicialism, whether the party was in the government or in the opposition.