Got a problem with Argentina being made to pay holdouts alongside its restructured bondholders?
Reckon it might happen to your sovereign (even if Argentina is apparently a “uniquely recalcitrant” debtor) and screw up its next debt restructuring?
Deal with it, says the Second Circuit of the United States Court of Appeals: Read more
If you really, really want to see the US Treasury’s final rule on its issue of floating rate notes (from the beginning of next year, using 13-week T-bills as a reference rate) — here.
Quelle blague with the pari passu saga, sometimes.
You go to all this effort to scare off the IMF from so much as bleating some tame reservations to the Supreme Court about how a ratable payment of holdouts by Argentina might hurt global ‘policy’ on sovereign debt restructuring. Despite ‘policy’ being something many expected the fund to look at.
Then you watch the French swoop in anyway. And they’re much fiercer than the IMF was going to be. Read more
Did you hear the one about the IMF sending an amicus curiae brief to the highest court in the United States in favour of taking up the pari passu case of its infamous lost cause, Argentina?
Well here’s the punchline: US opposition has abruptly killed the plan. Read more
There’s one thing about how the Qataris have gone about protecting their $5.5bn or so lending in Egypt — and it’s a small thing, next to a coup d’etat, the swift exit of the chap they’d bet on, and a looming balance of payments crisis…
But it’s a familiar thing:
Yes, it’s time for a trip back into those Cypriot debt contracts.
Cyprus announced the results of its sovereign debt restructuring on some €1bn of domestic-law bonds earlier this week. The one the Troika wanted for — OH. Oopsy-daisy. Did FT Alphaville say sovereign restructuring. We meant “debt management operation”. Read more
FT Alphaville had expected to report the triumphant acquisition of almost 10 per cent of the Greek bond market by a single, little-known investor on Monday. As per the original July 1 deadline on Japonica Partners’ unusual offer to bondholders.
A pleasure denied: Read more
There’s one last crossover to consider between Grenada and Argentina in the current pari passu saga.
Here we might be getting slightly further into the future of sovereign debt litigation. But it’s equally important for the IMF and other keepers of the system to keep an eye on, we think.
It just happens to involve a different piece of bond contract… Read more
Not a reference to the Second Circuit’s imminent ruling in the Argentina case, nor the Argentine government’s late-night petitioning to the Supreme Court over pari passu. Although it could be.
We’ve already seen how NML Capital v Argentina has influenced Grenada’s legal battle with the Taiwanese government-owned Export-Import Bank of the Republic of China.
Now for something that might particularly bear on the future. Read more
Not long now until the US Court of Appeals for the Second Circuit finally makes its ruling on trickier parts of the Argentina pari passu case. No later than early July, probably. Can’t wait.
Argentina couldn’t wait. The government filed its long-expected cert petition to the Supreme Court this week, mostly in order to complain about the federal-law implications of the Second Circuit’s original ruling in October 2012. There’s lots of outrage about ‘sovereign property’ and the US Foreign Sovereign Immunities Act.
But one Taiwanese development bank and its Caribbean island borrower, fighting each other over $32m of defaulted loans in The Export-Import Bank of the Republic of China v Grenada, really couldn’t wait… Read more
The Bank for International Settlements says there’s a problem. Governments, by and large, haven’t done enough to address the issues that have emerged during/since the financial crisis. Some monetary policymakers have done rather a lot, but much of it is in unchartered territory and carries risks. So, says BIS, monetary policymakers should just stop it henceforth.
From the latest BIS annual report: Read more
What to make of the 7 per cent levy which Hungary is imposing on bank holdings of local government debt?
This is debt that is being assumed by the central government. So, it was curious to see the government insist on Tuesday that its $219m tax collection isn’t a hidden write-down. (We should in any case preface this post by noting that Hungarian bonds have been bullet-proof lately.) Read more
And so FT Alphaville comes across “TENDER OFFER MEMORANDUM — INVITATION FOR TENDER IN RESPECT OF BONDS OF THE HELLENIC REPUBLIC”: the official launch of Japonica Partners’ eye-catching attempt to buy up to 10 per cent of Greece’s restructured bonds, in a kind of Dutch auction.
And there’s one very important point here. Read more
Like other Europe-focused strategists, William Porter at Credit Suisse has had some fun scrolling through the IMF’s mea culpa on Greece.
He notes that the IMF now admits that its actions were affected by a fear of market contagion, a misunderstanding of how to do a restructuring within a currency union and, most importantly perhaps, a dysfunctional dynamic within the Troika itself. Read more
Click for the IMF’s “ex post evaluation” of its role in the Greek bailout. Its mea culpa.
And if you thought we were being harsh here, parts of the real thing are excoriating.
This is even though the report decides Greece’s exceptional access to IMF lending was justified (generally), and it still says much fiscal adjustment could not be avoided. Policies were “broadly correct”. But it does strongly suggest that debt restructuring should have come sooner.
So, the International Monetary Fund (effectively) wishes to apologise to all concerned for that little thing where it turned into Dominique Strauss-Kahn’s presidential election campaign a few years back.
Sorry if a country got broken along the way: Read more
Just when we thought we’d dreamed Monday’s news of this.
The mysterious folks at Japonica Partners have come out with their full “tender offer” to buy up almost 10 per cent (€2.9bn) of Greece’s restructured bonds: Read more
Spotted on Tuesday… the pari passu saga that started in the US courts crosses another border. Belgium:
Well, the apparent uselessness of Finland’s Greek ‘collateral’ is all very embarrassing, and it’s also terribly public by this point. But surely there can’t be that much backlash over this rather arcane derivatives transaction.
Ah, hold on. Read more
We are not quite sure what is going on here.
Japonica Partners, a self-styled “entrepreneurial co-investment firm” based in Providence, Rhode Island, has launched a tender offer for almost 10 per cent of all Greek government bonds in circulation.
It’s ready to buy paper worth €2.9bn at par, paying a minimum of 45 per cent of face value. Read more
Somehow — was it the ludicrous secrecy, maybe? — you could tell this was coming.
On Wednesday, Jan Hurri at Taloussanomat took advantage of the Finnish government’s recent doc dump in order to reach a conclusion about its deal for ‘collateral’ on Greek bailout loans: Read more
Carmen Reinhart and Ken Rogoff wrote a letter to Paul Krugman.
He responded, and so did some others. (DeLong for Krugman; Hamilton for R&R.)
On it goes.
And why not? Austerity is an important subject, the empirical data or lack of it deserves a great deal of attention. Economists calling each other names, probably less so. But it’s so entertaining… Read more
UPDATE (Friday) – Judge Griesa said he won’t comment on Citibank’s request, at least until the Second Circuit’s final ruling on objections to the form of his order:
Citibank asserts that it needs clarification as to its obligations in the event that the Court of Appeals affirms the District Court’s November 21,2012 rulings. The District Court declines to make any further comment on matters now before the Court of Appeals. What further ruling or action is required from the District Court will obviously depend on the holding from the Court of Appeals. No more can be said at this time.
Now back to Thursday’s original post for the stakes involved…
Hat-tip to Bloomberg — it looks like we have a new entrant in the pari passu saga.
Technically it’s Citibank’s Argentine branch. They’ve made a slightly curious request for ‘clarification’ of Judge Griesa’s order last November for Argentina to pay bond holdouts alongside other, restructured creditors. (Payments just to the latter could be seized, and ultimately launch Argentina into a sovereign default… just to catch you up.) Read more
From historical chart specialists Global Financial Data — the yield on perpetual Consols versus the stock of UK sovereign debt…all the way back to 1742. Click to view… Read more
Quite a lot to ponder really. Members of the IMF’s executive board were set to meet on Wednesday to discuss whether to approve lending to Cyprus, more or less behind closed doors.
But maybe not so much this time. It looks like Stockwatch in Cyprus has obtained a copy of the members’ comments on the Cypriot bailout — a rather high-level internal document to find its way to the public… and it makes for fascinating reading. Read more
Abuse of official secrecy. It’s been one of the more corrosive but — by definition — shadier aspects of the eurozone crisis.
It can take the form of a report on money-laundering in Cyprus. Or the opaque process by which Troika debt sustainability analyses are drawn up. Emergency liquidity assistance to banks, even. Read more
Alternatively, what price to taxpayers for political pride.
Spotted in HM Treasury’s collection of responses to the idea of letting Scotland issue its own bonds later this decade — a… wide range of guesses about how they might be priced: Read more
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