UPDATE 1-Argentina asks mediator for stay on U.S. court debt ruling

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GermanHoldout wrote:

It would be a historic event and come in the historic books, if President Kirchner after 13 years finally finished this HORROR Default with an amicable agreement with the holdouts.

An agreement with the Holdouts would be a win-win situation for everybody!

For Argentina, for the Holdouts and also for the exchange bondholders, whose bonds rates would also be considerably increased.

Already now, with the expectations for an agreement, as we see, borrowing costs are lowering considerable.
A completed final agreement with the Holdouts would improve Argentina’s ratings, initiate a firework of investments and enable also cheaper credits for argentine companies.

Also 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.

FOLLOWING COULD BE THE SOLUTION TO END ARGENTINA’S NIGHTMARE DEFAULT

Under the review of Judge Griesa and Daniel Pollack, Argentina and the Holdouts 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 between Argentina and the Holdouts could look like this:

Argentina enters 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)

- 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 with a maturity of 5-7 years.

Jul 08, 2014 6:13am EDT  --  Report as abuse
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