Eugenio A Bruno
Garrido Law Firm
Director, TIG Americas
The market may believe that the "hammer" is sleeping, but I believe that the three judges are:
i) discussing internally (inside the pannel) whether or not there is consensus about the decisions (ratable payment and injunctions). In this regard, my take is that want to issue an uniformed decision, without dissents, which could eventually be strong. They want to avoid potential reversals from the U.S. Supreme Court and overall, that their ruling is wrong;
ii) discussing, informally, the issues with debt, financial and legal experts;
iii) discussing the issues with their own legal teams (clerks);
iv) discussing, informally, the case with the U.S. State, Treasury and Justice Departments regarding the "national interest" and other policy implications of the ruling;
v) having some doubts about the effects of the injunctions and may be also about the pari passu clause, but to a lesser extent;
vi) FINALLY, writing the ruling, which must be legally well-grouded, and should be long, with citations about applicable jurisprudence, among other aspects.
All this, of course, takes time. But please dont go to the beach in the U.S. summer time before ruling!
If what you are right about the expected delivery date for the Court decision, and the Court rejects Argentina's payment proposal (quite likely I would say) and maintains the injunction against BoNY (50/50 chance?) then the Argentine government will have very little time before its next debt payment (June 30th) and raising the likelihood of a technical default, assuming that the administration has not changed its stance (paying to the plaintiffs only if they accept the same treatment laid to exchange bondholders).
ReplyDeleteOf course, the government can initiate the payment procedures prior to the payment date, especially bearing in mind that June 30th is Sunday. But still, a negative ruling close to the payment date poses a problem for the government which must file an appeal and manage to get a stay on the Court's decision in a very short timeframe.