Well, this was fun while it lasted. Now what did it mean?
Click to enlarge the document capping a weird week in the pari passu saga:
It’s an order from the Second Circuit on Thursday, denying an unusual request filed on Monday by the Italian retail investors who count themselves among Argentina’s holdouts.
Although looking back at it, was the unusual or just ahead of the curve? Read more
Sometimes, the courts of England and Wales taketh away when it comes to the law on restructuring bonds and getting debtors out of holes. And other times they giveth.
A landmark decision by the England and Wales Court of Appeal on Monday falls under the latter… Read more
File under: Argentina’s battle with its holdouts and the effects thereof on pari passu clauses in sovereign bond contracts elsewhere in the world — with a special crossover to the changing legal status of official lenders in the eurozone crisis.
Spot the difference edition. Read more
In theory, there was no offer. “This is a proposal to judges, not an offer to vultures,” Argentina’s finance minister tweeted at the weekend.
For their part, the three judges of the US Second Circuit had ordered Argentina to tell them “how and when it proposes to make current those debt obligations on the original bonds that have gone unpaid over the last 11 years” (emphasis ours). It’s a last act in the battle that Argentina has been losing to stop restructured debt payments being linked to its defaulted bonds under the pari passu clause.
In practice, the 22-page letter that the government sent to the Second Circuit on Friday — containing “options” for holdouts to take payments “equitably and ratably” with bondholders who swallowed its 2010 debt restructuring, by getting restructured bonds in place of the original debt — pretty much was an offer.
And — it looks like — not one the judges can accept. Meanwhile, the market has panicked like wildebeest. Read more
Some excerpts from a lawsuit filed by the Export-Import Bank of China (Taipei) against Grenada in a United States district court on March 4, 2013…
If you have been following the pari passu saga on ratable payment of sovereign debt — they tell their own story. (Click to enlarge all images.) Read more
Headline via the Harlan Ellison short story. “Timewise, it was jangle…”
What a week for the pari passu saga, and the fight to show that an order for Argentina to pay holdouts ‘ratably’ alongside its restructured sovereign debt is both over-reaching, and an unfair threat to third-party bondholders and banks.
Yep, FT Alphaville also went along to the oral argument before three judges of the Second Circuit in NML v Argentina on Wednesday, along with about 300 other people. A pretty crazy affair in itself, the hearing has now led to a follow-up order from the court, telling Argentina to give “precise terms” explaining how it would pay holdouts, and how it would obey any decision of the Second Circuit. Read more
The EU’s Council and Parliament agreed on the text for two-pack laws on “enhanced surveillance” of sovereign bailouts on Thursday. It should be on the books soon.
So, if what happened in Greece last year was “exceptional and unique”… Read more
Update (Feb 26) – It turns out that we failed to be clear on something pretty important here… rendering our headline ironically pretty apt. Maybe you really can’t believe Belize’s disavowal of ratable payment on its bonds.
OK, so here’s the section on pari passu language in the new bonds’ Offering Memorandum: Read more
So, you’re wondering what kind of crisis Cyprus is. And you’ve watched the success of Nicos Anastasiades in the presidential elections so far. Anastasiades is not the kind of guy to demonise creditors for the sake of it, but he will have tough negotiations ahead of him of he wins. Read more
If there is anything that qualifies as protesting too much, surely this is it…
The finance minister of eurozone country X declares (as Vassos Shiarly of Cyprus did on Monday) that its bonds/its banks’ bonds/their depositors simply cannot be written down. Why? Eurozone country X’s constitution and laws just don’t allow it!
Well, on the contrary. Read more
At times, pursuing a defaulted sovereign debtor for full payment can almost (almost) come across as a facetious exercise. As when NML’s latest brief in the Argentine pari passu case quotes Casablanca. Read more
Holdouts’ opposition papers in the Argentine pari passu saga had just landed at pixel time on Friday. Here’s the one from NML itself, and here’s the one from other holdouts including Aurelius Capital.
We’ll try to do a proper take later on what the briefs say, but first, we thought we’d devote this post to some context on where the litigation is going as well. Read more
If you thought the Argentine pari passu bond saga had taken the holiday dead period off — then you don’t know the pari passu saga very well.
Some interesting developments squeezed in before the new year… Read more
Take one warship rescued from asset seizure by bond holdouts.
Add swelling music, defiant rhetoric by President Cristina Fernandez de Kirchner, the national flag stirring in the Atlantic breeze, and messages home from crewmen who remained on board while the dispute played out in a Ghanaian port and Hamburg tribunal… Read more
And so an Argentine training warship is free to sail off into the sunset, and out of the clutches of bond holdouts.
A riddle, wrapped in a mystery, inside an enigma, inside a pari passu clause.
Here are some terms from Italy’s 2015 US dollar bond, which it issued under New York law in 2010. It is a pari passu clause, even though you won’t find the words ‘pari passu’. Read more
Greece paid up to 40 cents in the euro for one of the bond in its buyback. Average price: 33.8 cents in the euro.
Or rather wants to pay. It has “advised… official creditors” that it wants another €1.29bn in EFSF notes to purchase all of the bonds tendered, up from the original €10bn.
The results, in table form via this release (click to enlarge): Read more
Yep, this is a Greece post in a series on Argentina and the pari passu saga.
We’ll explain. Read more
On October 26, the Second Circuit chucked out Argentina’s appeal against having to pay bond holdouts, having had “little difficulty concluding” that the defaulted debt’s dusty, old — but contractually standard — pari passu clause demanded rateable payment. Read more
And so ends a little saga-within-a-saga in the Argentine bond holdout case (but one which shed interesting light on the various sides’ litigating strategies). Read more
UPDATE – Beyond the to-and-fro about stays and the Second Circuit in the post below…
Bank of New York Mellon has filed for leave to appeal Judge Griesa’s revised order for Argentina to pay (and for third parties not to assist it in not paying – including BNY). This is a significant move given the role of BNY enabling payments to restructured holders as their trustee. It was kind of stuck in the middle over the dispute between Argentina, holdouts and restructured bondholders, and had last asked courts to clarify its obligations. This filing marshals indenture trust law, Rule 65(d) of the Federal Rules of Civil Procedure, and “dangerous precedent” to seek to challenge the merits of Judge Griesa’s ruling itself. Read more
Latin American country tells creditors they can’t be serious…
While acknowledging that the Committee’s counter-proposal provides a degree of short-term cash flow relief, the GoB considers it to be wholly incompatible with its objective of placing the country’s debt burden on a sustainable footing – a goal that the Committee itself has indicated it is committed to at various stages. The GoB believes that the counter-proposal ignores Belize’s high overall debt levels, and that it amounts to little more than a short-term fix not dissimilar to the 2007 exercise. Read more
Looks like those emergency bondholder briefs had some effect on the Second Circuit…
IT IS HEREBY ORDERED that the motion by the Exchange Bondholder Group for leave to intervene as interested non-parties for the purpose of appealing orders entered by the district court on 11/21/12 and for the purpose of seeking a stay pending appeal is GRANTED. Read more
Stay, actually. An emergency motion for a stay on Judge Griesa’s sweeping order in the Argentine bond holdouts case — filed on Monday night by the Exchange Bondholder Group:
It’s fair to say that many of those following Argentina’s grand bond holdout battle have been simply flattened by this week’s turn of events.
(Sometimes, literally so.) Read more
Let’s say you took part in Argentina’s original, 2005 debt restructuring.
You exchanged your luckless bonds for securities worth around 30 cents of your original dollar. You took your lumps – and you checked, very carefully, the complicated payment structure designed to ensure the Republic can’t stiff you in the future. Read more
For the complete experience of Judge Griesa ordering Argentina to pay holdouts in full and, even more importantly, extending duties to comply with that order to a very wide range of third parties…
Make sure to read his opinion on the pari passu basis; then the amended order to pay; and also — and a red rag to the bull for a government which is very unlikely to make that payment — a ruling that “threats of defiance” from Buenos Aires have pushed him to December 15, 2012 as the due date. No waiting around for the gavel to strike, here. Read more
Mark Weidemaier at Credit Slips has been blogging up a storm lately on why the Republic of Argentina’s fight with its holdouts has become so critical to the future of debt restructuring.
Now here he is on a blast from the past… Read more
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2The end of QE?
3The persistent supply-side constraints in US housing
4Bird, plane, Abe
5Bove vs Bloomberg, redux
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