NEW YORK The battleground between Argentina and its holdout creditors shifted from U.S. courts to the court of public opinion as both sides took out full-page advertisements to argue their cases in the world's major newspapers.
Just what can be gained from the ads, which appeared worldwide, remains to be seen given Argentina lost its legal case on June 16 when the U.S. Supreme Court declined to hear an Argentine appeal, letting stand a lower court's order that it pay holdout creditors $1.33 billion plus accrued interest.
Hundreds of thousands of dollars, perhaps over $1 million combined from both sides, has been spent on ads in the New York Times, the Wall Street Journal, the Financial Times and the Washington Post in the last three weeks.
Both sides have met with a court-appointed mediator in hopes of structuring a deal before a July 30 deadline, but they have not met face-to-face.
Argentina's Economy Minister Axel Kicillof has made speeches at the United Nations and in Washington, repeatedly calling the holdout creditors "vultures" and saying that U.S. District Judge Thomas Griesa's rulings were biased.
Argentina published legal notices saying it wouldn't be responsible for a default because it deposited money with Bank of New York Mellon at its central bank. U.S.-based BNY Mellon, the indentured trustee, is seeking Griesa's guidance on what it should do with the money.
Key holdout creditor Jay Newman, portfolio manager at Elliott Management Corp, had an opinion piece published in the Financial Times reiterating a desire to negotiate. This was followed up by an ad from the American Task Force Argentina, a lobbying group supported by Elliott and others that calls for Argentina to abide by the court ruling and pay its debts.
"Argentina has been putting out misinformation in lieu of negotiating," Robert Shapiro, co-director of American Task For Argentina (ATFA), said from Buenos Aires where he plans to hold a press conference with the local media. "We decided to put out ads that set the record straight in case Argentina says it was forced to default."
ATFA placed a full-page ad in the Financial Times on Tuesday, which was repeated in the Wall Street Journal on Wednesday, titled "The Facts of Argentina's Debt Dispute."
Argentina fired back at the ATFA with another full-page ad on Wednesday titled: "VULTURE FUNDS: FACTS SHOW THAT IT IS NO MYTH THAT THEY ARE VULTURES." Attempts to reach Argentina's embassy in Washington, which e-mailed copies to the media, were unsuccessful.
"In the end, nothing that President (Cristina) Kirchner says, nothing Kicillof says, nothing that I say or Jay Newman says has any effect on the court rulings," said Shapiro. "If they would comply with the court rulings, nobody would have to run any ads for anything. It could have been settled last week."
(Additional reporting by Jennifer Saba in New York. Editing by John Pickering)