Argentina Must Pay $539 Million Today - Default Imminent

Tyler Durden's picture

Today is the day that Paul Singer and his Elliot Capital Management team have been waiting for. Thanks to SCOTUS' decision, as Bloomberg reports, Argentina is poised to miss a bond payment today, putting the country on the brink of its second default in 13 years, after a U.S. court blocked the cash from being distributed until the government settles with creditors from the previous debt debacle. The decade-long battle between Argentina and holdout creditors from the country’s $95 billion default in 2001 is coming to a head as the judge’s decision “closes Argentina’s options to finally force it to negotiate," and "should now stop using these delay tactics and get serious." Argentina sees it a different way, the ruling "is merely a sophisticated way of of trying to bring us down to our knees before global usurpers,” according to the economy minister Axel Kicillof.

 

Amid all this, Argentina' MERVAL remains near all-time record highs... (as equity hopes of devaluation trump bond fears of default)

 

As Bloomberg notes, if non-payment were to occur today, default would not be officially triggered yet (forcing Argentina's hand to negotiate)...

The nation has a 30-day grace period after missing the $539 million debt payment to seek an accord with a group of defaulted bondholders led by billionaire Paul Singer’s NML Capital Ltd. and prevent a default on its $28.7 billion of performing global dollar bonds. Both Argentina and NML have said that they’re open to talks.

 

A decade-long battle between Argentina and holdout creditors from the country’s $95 billion default in 2001 is coming to a head.

 

...

 

The judge’s decision “closes Argentina’s options to finally force it to negotiate,” said Jorge Mariscal, the chief investment officer for emerging markets at UBS Wealth Management, which oversees $1 trillion. “Argentina should now stop using these delay tactics and get serious.”

Buit Argentina is not happy...

The ruling “is merely a sophisticated way of of trying to bring us down to our knees before global usurpers,” Argentina said. “But he will not achieve his goal for quite a simple reason: The Argentine Republic will meet its obligations, pay off its debts and honor its commitments.”

 

In an e-mailed statement, the Economy Ministry said Griesa is abusing his power and acting outside of his jurisdiction as the restructured bonds are not part of the holdouts’ case.

 

"A judge is trying to impede a debtor from carrying out its obligations and creditors from getting paid,” the ministry said.

Elliott is hopeful...

Jay Newman, a money manager at Elliott’s NML Capital, said in an interview, “We are hoping to have the opportunity to negotiate with Argentina.”

We will see... can the world's fragile rehpothecated markets handle a technical default on near $30bn? For now, no one seems worried.

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flyonmywall's picture

You can't squeeze blood from a turnip. I'm sure Elliot Capital Management will try, and has CDS on the current round of bonds too.

Fucking vultures.

Azannoth's picture

Do you mean this Turnip ? It might not have blood in it but it's certainly worth "something"

lordylord's picture

The bastards finally ran out of other people's money.  I won't hold my breath for free markets and sound money to return to Argentina.  People will of course beg for MORE GOVERNMENT.

Groundhog Day's picture

Holdouts will be screwed again.  Argentina is in the drivers seat.  They've been locked out of the International capital markets for a long time, i dont think they really give a shit any more.  They will default and let the cards fall.  just my worthless opinion

BurningFuld's picture

It's just not fair that people that never had any hope of ever being paid back in the first place (Why the fuck did you lend them any money) aren't going to be paid back. I think Obama needs to step in here and fix this.

Unknown User's picture

Let's see who will blink first...

Handful of Dust's picture

<< Why the fuck did you lend them any money >>

 

Bankers and finance offciers get huge commissions and bonuses when they land a loan even if there is no hpe of it ever being paid back. They don't care since by the time the debtor defaults, the loan officer has already banked his money, changed jobs and moved on. Losses are eaten by shareholders, taxpayers or some other innocent party who usually had nothing to do with the loan to begin with. There's zero down side for the loan originator.

JLee2027's picture

That quote is priceless that a Judges ruling with force Argentina to negotiate. What kind of moron thinks like that?

The judge’s decision “closes Argentina’s options to finally force it to negotiate,” said Jorge Mariscal, the chief investment officer for emerging markets at UBS Wealth Management, which oversees $1 trillion. 

LOLOLOLOLOL

Vampyroteuthis infernalis's picture

The question is how will this influence the CDS mountain? Since they defaulted over a decade ago my guess is not many were written that are left on this debt.

Landrew's picture

The scum Singer and one other theft are the hold outs keeping other people who have settled from getting paid. They are holding bonds worth 1.3 billion holding up 15 billion in agreed to settlements. Singer is a banker scum! This isn't about Argentina as much as it is about confiscating all of our funds. These vultures are the end of workers. Don't kid yourself they are holding small amounts of every countries debts bought for pennies on the dollar. Singer is a O'Bummer/Bush insider who bought them as well! Singer should be banished from this country!

Tourist2008's picture

No he is not, Argentina is quite capable of paying the restructured bonds, all it has to do is comply with the Court Order that they pay Singer at the same time. Simple, but they still dont want to do it.

In all debt restructurings, you have to first decide whether its a debtor who cant pay or who doesnt want to pay. Argentina is clearly in the second category.

Matt's picture

I'll laugh pretty hard if Argentina decides not to pay the holdouts at all, and the CDS committee decides it is a non-event, no pay out. Since, whether a default is a default or not is decided by a vote of a group of people who probably sold you the CDS in the first place and have a strong incentive not to pay. 

what&#039;s that smell's picture

usury. usury. usury.

infinite fiat. infinite fiat. infinite fiat.

merchant of venice. merchant of venice. merchant of venice.

money changers in the temple.......

paul singer wants his pound of flesh, oh ye antisemites.

Tourist2008's picture

Actually Argentine is desperate to return to the Capital Markets. Why else do you think they settled with CIADI, The Paris Club and Repsol all in the last few months?

The big provinces all have international debt issuance lined up and ready to go .... cos several dont have funds to pay state employees at the end of June. Good to know that the new debt will be put to such productive use though.

The Kirchner gov´t being what it is though, expect it to go to the wire.

StandardDeviant's picture

Yes.  Did you see Kirchner's full-page ALL-CAPS hissy fit in the NYT the other day?

GetZeeGold's picture

 

 

Socialism..........BOOM.......#WINNING!!!

 

Looks like they just ran out of other peoples money.

knukles's picture

Even socialists have to pay their bills.
Even though thye don't think so.

"Math, the New Inconvenient Truth"tm

Debtors have to pay when due.
Let them off of the hooks and you're applauding GM's federally mandated screwing of the bondholders.

swmnguy's picture

No, I think he meant the turnip shaped like a thingy.

flapdoodle's picture

Singer won't get anything from the Argies - they don't have anything left as Christina and the Kirchners have stolen everything of value already...

Urban Redneck's picture

But Singer isn't even the big man at the table. I'm sure Brennan and Jew Lack would love for Argentina to liquidate their gold account at the BIS to cover the fiat bill, it would save them the cost of a regime change.

MeMongo's picture

Redneck

Ooops! You may have transposed your letters hehe! Reminds Mongo of South Park wheel of fortune " people who annoy you"  "uh I know it, but I don't think I should say it".

ZDRuX's picture

Trying to get your money now makes you a vulture? What are you smoking?

knukles's picture

Supposed to pay them water and gas bills, too!

effendi's picture

Why is a creditor a vulture? The Argies borrowed the money, the Argies wasted the money and now the Argies owe the money. It isn't an odious debt as the money was borrowed by populist governments that had been elected by morons to spread the skittles around. Now it is time for socialists to pay the piper.

Might not get blood from a turnip but you can still roast or mash the buggers. 

Eyeroller's picture

Just following the Alinsky playbook.

How dare creditors demand payment?

fnord88's picture

they bought the distressed debt for 4 cents on the dollar i think. they were offered 30c, and refused anything other than $1.

 

they don't deserve a fucking penny.

 

that said kirchoff deserves everything she gets

WillyGroper's picture

" kirchoff"

There's a law for that.

fnord88's picture

Lol....... how does evilbitchface go over? 

 

Seriously Banks vs communists. ...I hope they all go fucking broke

 

zerocash's picture

I think they mean that Elliot bought the debt for pennies on the dollar and now demands full payment of the original amount. Financial companies which are specialized in those kinds of deals are called "vulture funds". They hover around a troubled debtor until they die and then pick off any assets that they can from the corpse.

Urban Redneck's picture

It's not so black and white. The NY courts are the most corrupt in the civilized world. The commercial code itself is a bought and paid for joke, never mind the regulatory capture, which is why no self-respecting business person uses it in contracts, unless their counter party is a US bank and they are desperate for a loan. Is Singer such an idiot that he didn't know this, and if he did, to what extent did he capitalize on it?

jubber's picture

So what Spanish Banks are up to their eyeballs with this shit?  Santander, Bilbao?...all of them?

_ConanTheLibertarian_'s picture

That mervelous merval stock index might take a deep dive...

sidiji's picture

default has been imminent for what..the past 20years?  tell us something new.

AssFire's picture

Argentina is a pro at this shit- just wait and see our urban savages go tribal when the US finally defaults.

Dr. Engali's picture

Homeland security didn't buy billions of rounds of ammo for rabbit hunting.

 

 

'Homeland', think about that a minute. Fascist Germany had the Fatherland, communist Russia had the Motherland and we have the Homeland....What's that tell you?

Azannoth's picture

"What's that tell you?" - that all Maniacs think alike, or .... (conspiracy theory alert) all 3 Regimes come from the same source (Bilderberg, Illuminati, Freemasons, etc.)

economics9698's picture

"And his hunger burns
so he starts to roam the streets at night
and he learns how to steal
and he learns how to fight
In the ghetto"

NoDebt's picture

That was a great Joe Walsh song.  ;)

Abi Normal's picture

Even tho we hail from different spectrums, I have to agree with what you just wrote doc...

what&#039;s that smell's picture

the bond payments are meaningless.

whom (a pound of flesh, austerity, shock therapy, etc) or what (gold reserves, shipping ports, toll booths, etc) is the collateral?

how do you say loan sharking in argentina?

zerocash's picture

Sounds more ominous in German: Heimreich Sicherheit.

Ghordius's picture

that's a good one. "homeland" always sounds like "reserve", to my ears

btw, in German, it's still Vaterland (as in French and Italian) and in Russian it's still Rodina (Motherland). ideology has little to do with it

_ConanTheLibertarian_'s picture

Actually, Heimat in German means Homeland.

Cathartes Aura's picture

Heimat was the name of a very well produced episodic journey through post Great War towards "the present" - which would be the 1980's, when it was released. . . though more episodes were added to flesh out the original series.

apparently one of Kubrick's favourite films. . .

Farqued Up's picture

Hope you're right but I believe it's for tax protesting ZHers.

GoldIsMoney's picture

You mean that calls for way too big misery in form of war? I guess you got that very right.