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From the Buenos Aires Herald online-.
"Ruling Victory Front lawmakers passed the Sovereign Payment bill -establishing the local payment agent for creditors, a new voluntary debt swap, and the creation of a permanent bicameral debt oversight committee- in the Lower House of Congress with barely no support from opposition blocs. ".
[URL]http://www.buenosairesherald.com/article/169483/those-who-voted-against-favour-vulture-funds[/URL]
The "BODEN" bonds 7% due October 3rd 2015 trade around 95.
[QUOTE=Canardly;441251]From the Buenos Aires Herald online-.
"Ruling Victory Front lawmakers passed the Sovereign Payment bill -establishing the local payment agent for creditors, a new voluntary debt swap, and the creation of a permanent bicameral debt oversight committee- in the Lower House of Congress with barely no support from opposition blocs. ".
[URL]http://www.buenosairesherald.com/article/169483/those-who-voted-against-favour-vulture-funds[/URL]
The "BODEN" bonds 7% due October 3rd 2015 trade around 95.[/QUOTE]I predict that an overwhelming majority of Exchange Bondholders will decide that their temporarily non-performing USA adjudicated bonds are preferable to any class of Argentina adjudicated bonds, period.
This is all just a political ruse to mollify the great unwashed masses.
Kicillof has repeatedly insisted that there are tens of thousands of exchange bondholders who have expressed interest in exchanging their USA adjudicated bonds for Argentina bonds, but in fact the media has been unable to find more that a small handfull of actual volunteers.
Jax.
The vast majority of institutional holders of these bonds will be uncomfortable receiving interest and principal in Buenos Aires.
To me it's very interesting how well the prices have held up. The "BODENS" 7% due in October 2015 are quoted at 95.
For investors who would like to receive "Argentina Legal" US dollars in BsAs it's an interesting opportunity. Yield to maturity about 15% at current prices -.
And particularly if the institutional holders start a likely selling stampede when they focus on their legal status according to their internal governing regulations.
[QUOTE=Canardly;441253] Yield to maturity about 15% at current prices -.[/QUOTE]The yield to maturity is indeed enticing, but the big unanswered question is whether or not Argentina will actually pay when the bonds mature. For me, non-payment is not worth the risk.
Tres3.
[QUOTE=Canardly;441253]And particularly if the institutional holders start a likely selling stampede when they focus on their legal status according to their internal governing regulations.[/QUOTE]Many institutional holders are by their own rules prohibited from holding bonds in default status, and thus at some point they will be compelled to sell off any Argentina "exchange bonds" in their portfolios, resulting in a swift devaluation in said bonds.
I predict that at that time the "vultures" will pickup up more of these distressed "exchange bonds", again at so called "bargain" prices.
Thanks,
Jax.
BTW, if Elliott Management, NML Capital, etc. Are "the vultures", then doesn't that make Argentina "the carcass"?
J.
'the big unanswered question is whether or not Argentina will actually pay when the bonds mature".
Argentina will pay because it is anxious to re-establish foreign credit, it has many attractive projects needing funding (ie Vaca Muerte) though it probably won't go back to Wall Street.
http://www.buenosairesherald.com/article/169492/argentina-will-return-to-foreign-markets
[QUOTE=Canardly;441257]Argentina will pay because it is anxious to re-establish foreign credit, it has many attractive projects needing funding (ie Vaca Muerte) though it probably won't go back to Wall Street.[/QUOTE]I'm sorry; I have to go. It's time for my pig's flying lesson.
[QUOTE=Canardly;441257]'the big unanswered question is whether or not Argentina will actually pay when the bonds mature".
Argentina will pay because it is anxious to re-establish foreign credit, it has many attractive projects needing funding (ie Vaca Muerte) though it probably won't go back to Wall Street.
http://www.buenosairesherald.com/article/169492/argentina-will-return-to-foreign-markets[/QUOTE]Any project that includes Argentina is NOT attractive. Guaranteed they will screw it up, or rob the investor, or nationalize the project. Just look at recent history!
Comparing the relative attractiveness of Argentinian investment opportunities is a lot like trying to decide which fat American b!tch you should marry.
I would NEVER advise anyone to hold Argentine sovereign debt (regardless of jurisdiction) OR any other assets within the borders of Argentina. The cancer is so profoundly deep in all things Argentina that it's not worth the risk or trouble. That being said, after the RUFO clause expires in January I believe the government will be obliged to negotiate a settlement with the so-called vultures because there simply will not be any money to pay for essential imports (energy, capital goods, medical supplies). I fully expect a particularly rotten summer as there is no way the government will be able to keep the electricity on in the CABA.
[QUOTE=ElAlamoPalermo;441263]I would NEVER advise anyone to hold Argentine sovereign debt (regardless of jurisdiction) OR any other assets within the borders of Argentina. The cancer is so profoundly deep in all things Argentina that it's not worth the risk or trouble. That being said, after the RUFO clause expires in January I believe the government will be obliged to negotiate a settlement with the so-called vultures because there simply will not be any money to pay for essential imports (energy, capital goods, medical supplies). I fully expect a particularly rotten summer as there is no way the government will be able to keep the electricity on in the CABA.[/QUOTE]Electricity is a huge problem now a days. Its normal to have electric cut every other day here while they try to patch the system up. I am waiting for two years for electric to a new house. On a street that HAD electric ten years ago. Edenor slowly cannibalized all the wire, transformers and even the poles until there was nothing left because at that time no one lived on that block. They finally put new poles in three months ago but now they are waiting for cable! All this because they have not been allowed to raise their rates for over ten years and they can't even maintain what they do have!
It will be interesting to see how many bonds are actually converted.
[URL]http://finance.yahoo.com/news/argentina-passes-law-pay-off-bonds-outside-us-095208938.html[/URL]
Tres3.
[URL]http://www.bloomberg.com/news/2014-09-12/venezuela-threatens-harvard-professor-for-default-comment.html[/URL]
[QUOTE=RetireNTrave;441267][URL]http://www.bloomberg.com/news/2014-09-12/venezuela-threatens-harvard-professor-for-default-comment.html[/URL][/QUOTE]Argentina is following right behind. Cristina is using the same game plan but without Venezuela's huge oil reserves.
I had a good laugh reading this article about CKF's plan to build the tallest building in Latin America. This confirmed my suspicion that she's lost touch with reality?
[URL]http://abcnews.go.com/International/wireStory/argentina-plans-latin-americas-tallest-building-25415173[/URL]
Argentina Plans Latin America's Tallest Building.
Argentine government says 'patriotic' tower will be Latin America's tallest building.
The Associated Press.
BUENOS AIRES, Argentina.
Argentina says it will build the tallest building in Latin America.
President Cristina Fernandez says the 1,165-foot (355-meter) tower is expected to cost around $300 million and will serve as a center for the entertainment industry, including television and movies studios "Hollywood" style.
Architectural plans released Wednesday depict it as being in the shape of Argentina's map while an outdoor stadium for 15,000 people at ground level is shaped like the map of the Falkland Islands. The British territory in the South Atlantic is claimed by Argentina, which calls it Las Malvinas.
Fernandez says the building, which will be lit in the sky-blue and white colors of the national flag, is to be constructed on state lands with private funding. It will be located on Demarchi island in southern Buenos Aires overlooking the River Plate and is planned to rise higher than the 984-foot (300-meter) Costanera Center tower nearing completion in Santiago, Chile.
The winning design for the Buenos Aires project was announced on Fernandez's Facebook page Wednesday. It comes as her government struggles with a recession, a shortage of dollars and one of the world's highest inflation rates.
The half-pipe ramp-like design of the building produced hundreds of comments on social media, including by professional skateboarder Tony Hawk. "Just after we left Argentina, they approve this skyscraper design (1200 feet tall). Coincidence?" Hawk said on his Twitter account.
Others took to social media to poke fun at the plan by posting images of King Kong on top of the building or a line graph resembling the structure that shows Argentina's spiraling inflation.
The building is expected to be completed within five years. Fernandez ends her presidential term in December 2015.