​Upping the ante… once more.

ARGENTINA - In Brief 26 Jun 2014 by Esteban Fernández Medrano
Economic Minister Axel Kicillof, just announced that the government made today the transfer to pay the coupons of the Discount bonds which mature on Monday. In total, the payment was close to close to 1bn USD, out of which USD 539nm where transferred to the BoNY to be used to honor debt under US jurisdiction. Argentina requested on Monday (and again today) that Judge Griesa reinstates the “stay” order to be able to negotiate with holdouts. But such decision has not been taken yet. This payment therefore puts pressure on the judge to either immediately confirm that petition or reject it. In case it is rejected it obliges BoNY to embargo those USD 539nm, as the it is not allowed to pay restructured bond holders, before Argentina does not honor its payment obligations with Hold outs. In such case we assume that Holdouts would demand to be partially paid with those funds. If the stay is not implemented and the funds are embargoed, Argentina might very well use the 30 days windows until entering into a formal default to move forward with the “jurisdiction swap stategy”. For the time being this decisions remains in Griesas hands who is in contact with Argentina’s lawyers. The instruction the government gave so far to their representatives was to find a negotiated way out. But the payment decision shortens the timeframe.

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