IMF: "See, we told you - Anne Krueger was rigth"

The IMF is back with suggestions on sovereign debt restructuring. They published a paper on May 23 about the state of the sovereign debt restructuring. And mentions the Argentina judicial case in New York.

They promote debt restructurings, and sooner. "Restructurings have been too little and too late." Probably, the paper is too late to influence the NY panel in the Argentine case. An Amicus Curiae brief should have helped...

The IMF also promotes haircuts: remember the moral hazard. The theory is back. The losses should be borne by the private creditors too because they financed bad governments. Usually the IMF also participated in financing those bad governments. So....

And finally, the IMF is back with its SDRM, or Anne Krueger proposition, which is a bankruptcy systems for sovereign debts. Why? Because the Argentine legal case in NY is showing that the CACs will not be enough to deal with the holdouts. However... the SDRM may also fail, because it is also based on collective action from the creditor on aggregate basis, such as the new CACs. I guess that at least they must show something to help their members. Too little, too late.

Eugenio A Bruno
eab@garridolawfirm.com

The "Sleeping Hammer" and the Delivery Date for the N.Y. Appeal Court?

We expect the "Delivery Date" of the Court of Appeal´s Decision to be around June 27, 2013
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!

Reuters: Argentina faces very different debt default if loses legal fight

 http://www.reuters.com/article/2013/05/13/us-argentina-debt-idUSBRE94C0AB20130513

 

 

 

 

Discussion of the new Argentine Financial Instruments under the New Money Laundering Program

We will discuss the new program and debt instruments in two seminars of TIG Americas:

May 17 in Montevideo (info.uruguay@theinstituteglobal.com)

May 29 in Buenos Aires (info.argentina@theinstituteglobal.com)

Different judicial outcomes will lead to different policy options and financial outcomes

Different judicial outcomes will lead to different financial outcomes

At the end of the day, a negative and definitive judicial decision may lead to a default. On the contrary,  a better ruling may save the entire situation. Read this paper and send me your comments and questions at eab@garridolawfirm.com
 
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2252210

Judicial Options Listed Vote for yours

Why outcome we will have? Send me your election and explanation to eab@garridolawfirm.com of the options listed in this paper:

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2255962

Or other options not listed

Eugenio A Bruno

Upcoming paper on Argentina Debt with questions and answers

I am writing a paper with questions from people that are following the Argentina Debt situation. In case you would like to ask, please send your questions to: eab@garridolawfirm.com