Argentina’s government is proposing a voluntary bond swap on its foreign debt, shifting payments to Buenos Aires, if it cannot overturn US court rulings that threaten to trigger its second debt crisis in just over a decade.
The bond swap would allow Argentina to keep paying the creditors who agreed to restructure the country’s sovereign debt after a record US$100 billion default in 2002, Argentinien President Cristina Fernandez said in a televised address on Monday night.
Investors in international markets would have the option to swap their foreign debt for Argentine bonds if ongoing appeals of the US court rulings are rejected, a government source said on condition of anonymity.
Argentina on Friday lost its appeal of a US court order requiring it to pay US$1.33 billion to “holdout” hedge funds that refused steep discounts following the 2002 default.
If Argentina refuses to pay off the holdouts in full, the ruling could block payment overseas to the 93 percent of bondholders who accepted restructurings in 2005 and 2010 that give them less than US$0.30 on the dollar.
In a direct plea to the US Supreme Court, Fernandez urged justices to overturn the decision, which she warned could undermine future sovereign debt restructurings.
She also proposed a third restructuring of Argentina’s defaulted debt, offering holdouts another opportunity at the terms offered in the 2010 bond swap.
Her more conciliatory tone contrasted sharply with her past denunciations of the so-called “vulture funds” she accuses of trying to bankrupt the country. That defiant attitude had drawn the ire of judges in the US, who fault Argentina for a lack of good faith negotiation with creditors.
Still, Fernandez insisted that her government was meeting its obligations and rejected one appeals court judge’s description of Argentina as a “uniquely recalcitrant debtor.”
“I would say that rather than ‘recalcitrant debtors’ we are serial payers,” she said. “Just as the country entered the Guinness [World Records] for the biggest sovereign debt default, we should also be in the Guinness among the countries that have most fulfilled our obligations over the past 10 years.”
In the 2005 and 2010 restructurings, Argentina issued international debt under New York, British and Japanese law.
However, Fernandez’s proposal of a new bond swap raised questions about whether investors would be interested in taking Argentine bonds in lieu of foreign debt, given strict currency and capital controls that the left-leaning Fernandez government has imposed.
“Changing the location of the payments to Buenos Aires is going to be extremely complicated amid the currency controls,” said Jorge Todesca, a former Argentinian deputy economy minister who is now head of the Finsoport economic consultancy.
“Argentina will never be able to issue public debt abroad if it continues trying to dodge a settlement,” he said. “We can assume Argentina will continue to be financially isolated from the rest of the world as long as this goes on.”
Softbank Group Corp plans to keep a stake in the chip designer Arm Ltd, even if it sells a partial interest to Nvidia Corp, the Nikkei reported. The companies are negotiating terms, the newspaper reported, citing sources. Softbank might take a stake in Nvidia after it buys Arm, the report said. Nvidia and Arm might also merge through a share swap, and Softbank would become a major shareholder in the combined company, it said. The two parties aim to reach a deal in the next few weeks, the sources said, asking not to be identified because the information is private. Nvidia is the
Gold surged to a fresh record on Friday, fueled by US dollar weakness and low interest rates, while silver headed for its best month since 1979. Spot bullion is up more than 10 percent this month, as US real yields lingered near record lows. While the ferocity of rallies in gold and silver cooled in the middle of the week, most market watchers predict there might be more gains ahead. Both metals have added about 30 percent this year, with gold and silver exchange-traded funds boosting holdings to a record, as concern about the fallout from the COVID-19 pandemic fuels demand for
END TO SPECULATION: The hotel’s management contract has been extended, despite reports that it wanted to end its alliance with Hyatt Hotels over a deal with Riant Capital Singapore-based Hong Leong Hotel Development Ltd (豐隆大飯店股份) yesterday said it has extended a management contract to ensure the continued presence of the Grand Hyatt brand in Taipei, ending rumors that the two sides were parting ways. “We are pleased Hyatt is able to come to terms on the extension of the management contract of Grand Hyatt Taipei,” said Kwek Leng Beng (郭令明), executive chairman of City Developments Ltd (城市發展) and Millennium & Copthorne Hotels Ltd (千禧國敦酒店). Hong Leong Hotel Development is a subsidiary of Millennium, and both fall under the Hong Leong Group (豐隆集團). The Grand Hyatt Taipei (台北君悅大飯店), owned and built by
MOVING FROM CHINA? The article did not name the company, but Foxconn, Wistron and Pegatron were among firms chosen for a production-linked incentive plan in India An Apple Inc vendor is looking at shifting six production lines to India from China, which could result in US$5 billion of iPhone exports from the South Asian nation, the Times of India reported, citing people familiar with the matter who it did not identify. The establishment of the facility would create about 55,000 jobs over about a year, the newspaper reported, not naming the Apple vendor. It would also cater to the domestic market and expand operations to include tablets and laptops, the newspaper reported. Samsung Electronics Co and Apple’s assembly partners are among 22 companies that have pledged 110 billion