Judge Orders Argentina To Pay Every Cent It Owes
To Hedge Funds
In a ruling earlier this week, the New York Judge ordered Argentina to pay out every cent it owes Paul Singer's hedge fund Elliot Management, and other bond holders suing for $1.3 billion dollars in sovereign debt.
The suit has been going on for around a decade. The plaintiffs bought Argentine debt in 2001 and refused to restructure in 2005 and 2010. Argentina has maintained that it needn't pay these holdouts, and has been favoring bond holders that restructured instead.
But the holdouts have dauntlessly pursued their money in Court, and on the high seas.........
Read more: www.businessinsider.com
Argentina's President Now Has Two Options
It's looking more and more like Argentina will not be able to find a way to avoid paying bond holders through the American judiciary system.
So now it has two options — to pay "vulture funds" like Paul Singer's Elliot Management $1.3 billion in sovereign debt next month, or not to pay.
It sounds like a simple decision, but it has massive consequences. We like how one hedge fund manager and former co-chairman of Argentina's bond holder committee after 2001, Hans Humes, put it to the FT:
“When you have been so disrespectful of the courts, what did they expect [Judge] Griesa to do? . . . If problems arise in the sovereign debt world, then tough . . . Argentina should be called to task for being a rogue debtor and country,” he said. “Cristina will either throw in the towel or go scorched earth. One way or another she is done.”
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