Argentine holdouts say would discuss extension in good faith

Comments (1)
GermanHoldout wrote:

President Kirchner’s decision, reconciliation and negotiations with the holdouts, as we see, improves Argentina’s ratings, makes cheaper credit possible, initiates a firework of investments and enables also cheaper credits for argentine companies.

The whole world would be very pleased, if this since 2002 ongoing NIGHTMARE-DEFAULT finally had been finished!

Under the review of Judge Griesa, Argentina and the Holdouts may come together, to end this HORROR-Default, with endless suffering for tens of thousand holdout creditors and their families worldwide.

THE PROCESS COULD BE FOLLOWING:

The “RUFO” clause (Rights Upon Future Offers) expires as of December 2014. That means, that from 01/01/2015 Argentina can make a better offer to the Holdouts, than it made in 2005 and 2010.

Argentina and the holdouts make NOW A BINDING AGREEMENT with respect to the “time after” (end of the “Rights Upon Future Offers (RUFO) clause in December 2014), seizure risks and a technical Default would be immediately averted. Argentina could immediately return to the capital market and thus Argentina could refinance the payments to the holdouts, without using reserves.

In practice the negotiations could look like this:
Argentina should enter into good-faith negotiations with the holdout creditors – all of them –via the offices of NML Capital. A firm deadline should be set to reach an agreement, say January 2, 2015, two days after the expiration date of the Rights Upon Future Offers clause.

HOW COULD BE THE CONDITIONS FOR THE REPAYMENT?

Argentina owes to today about 230% to the Holdouts (since 2002 Argentina has not repaid anything to the holdouts)
Possibilities e.g.:
1,
at the latest, on 02/01/2015 (end of RUFO clause) Argentina (or investment banks, funds) make a buyback offer to the holdouts in cash of about 140-150% (for owing capital+ accrued interest between 2002-2015).
(Argentina owes to today about 230%, a cash buyback of 140-150% would so mean for Argentina already a debt relief of about 80-90%)

2,
- at the latest, on 02/01/2015 (end of RUFO clause) Argentina would repay in CASH 100% of the nominal value of the defaulted bonds, which became due before 2015.
- For the accrued interest between 2002-2015 (until now about 130%), Argentina would emit new bonds in worth of about 80-100% (means about 30-40% Discount), and with a maturity of 5-7 years.

Jun 24, 2014 4:33pm EDT  --  Report as abuse
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