On Friday, March 31, New York Judge Loretta Preska ruled against Argentina for the renationalization of YPF. Five days later, the country receives a judicial setback again by losing a lawsuit brought by four funds to the High Court in London relating to bonds “GDP coupons”. On this occasion, the payment will be about 1,330 million euros.
Quickly, hehe markets begin to realize the new bad news and before the formal opening of the market, los global bonds fell as much as 5% abroad.
At the beginning of the wheel, the negative trend was maintained and the sovereign debt securities were all in red. After noon, the Global 2029 it sank -4.81%, followed by the Global 2030 (-4%) yesl Global 2035 (-3,8%).
Sovereign bonds plummet after Sergio Massa’s “poorly executed” measure
In this way, the bonds that have already been registering a series of downward wheels continue to deepen their bad streak
What was the ruling against Argentina
On the Argentine morning of this Wednesday, April 5, in Great Britain, the judge Simon Picken, dhe High Court London, found the country guilty in the case known as “GDP coupon”. He The State was accused of modifying the way of calculating the gross domestic product (GDP) to avoid paying interest on a debt issued in 2005 when Roberto Lavagna was in charge of the Ministry of Economy, as an exchange of defaulted titles in 2001.
The Court agreed with the four plaintiff funds, Palladian Partners, HBK Master Fund, Hirsh Group LLC y Virtual Emerald International Limitedand Argentina must pay them damages and compensation for 643 million euros (US$704 million), according to the news agency Noticias Argentinas.
Susan Prevezer, representative of the funds, pointed out that economic statistics were “object of political direction” in Argentina under the presidency of Cristina. But Argentine state lawyers asserted that “no rational government deliberately underestimates GDP” and noted that the country had paid nearly $10 billion to holders of GDP-linked bonds since they were first issued in 2005.
One of the lawyers from Argentina, Tamara Oppenheimer, pointed out at a hearing that it is country likely to request permission to appeal rulingaccording to a cable from the Reuters agency.
The titles were issued in different currencies and the The objective was that Argentina would pay more the more its economy grew. However, in 2012 they stopped paying and two years later the former Minister of the Economy and current Buenos Aires Governor Axel Kicillof announced that economic growth in 2013 had been 3%, less than the 3.2% necessary for the payment of the GDP coupon for a total of US$ 3,000 million.
Although in 2014, INDEC reported that the economy had grown 4.9% in 2013, according to the estimate made based on calculations in 1993, it was finally decided to apply a new methodology to calculate GDP, based on 2004.
During the administration of Mauricio Macri, it was determined that in 2013 the Argentine GDP had grown only 2.4%. Therefore, the four funds decided to sue Argentina for the payments that the country had not made concrete and a London Court accepted the companies’ claim.
Sergio Massa plays another plenary session: the field dollar arrives
Waiting for Massa’s announcement
As the government continues to pile up bad news from abroad, the Economy Minister Sergio Massaseeks to reverse the complicated economic situation of the country through various measures, including the detail of new farm dollara differential exchange rate that will be around $300.
The measure seeks to encourage agro-exporters to liquidate, in order to put a temporary brake on the daily drain of foreign currency faced by the monetary authority.
Country risk on the rise
At the start of the day, the country risk opened higher and it was close to 2,400 basis points. The index, prepared by JP Morgan, rose 2% and reached 2398 basis points. It should be remembered that this marker measures the difference that US Treasury bonds pay compared to the rest of the countries
RM / LR
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