Argentina sentenced to credit default

Eduardo Petazze
June 16, 2014
On June 16, 2014 the Argentina's petitions for writs of certiorari were denied.
A voluntary negotiation between the litigants, is not possible before 1
st
. January 201, under the RUFO !"ights #pon
$uture Offers% clause.
If following the expiration of the Invitation until December 31, 2014, Argentina voluntarily maes an offer to
purchase or exchange or solicits consents to amen! any securities eligible to participate in the " exchange
offer " , Argentina will tae all steps necessary so that each hol!er " will have the right, for a perio! of at
least 30 calen!ar !ays following the announcement of such offer, to exchange any of such hol!er#s " for the
consi!eration in cash or in in! receive! in connection with such purchase or exchange offer or securities
having terms substantially the same as those resulting from such amen!ment process, in each case in
accor!ance with the terms an! con!itions of such offer to purchase, exchange offer or amen!ment process$
$ro& the de'ision of the litigants 'reditors, and the e&bodi&ent of the (udg&ent available to the lower 'ourt
deter&ined that the possibility of Argentina to de&and full 'o&plian'e, or are for'ed to de'lare a new default.
August 23, 2013
)he August 2*, 201*, the #.+. ,ourt of Appeals for the +e'ond ,ir'uit, ruled that Argentina's appeal against two
adverse de'isions of first instan'e, are dis&issed !google docs., 26 pages%
-nfor'e&ent of the in(un'tions shall be stayed pending the resolution of the +upre&e ,ourt !+,% of the writ of
certiorari
)he debt in .uestion was part of the original debt de'lared in default by the Argentine govern&ent in late 2001 and
then, &ostly, e/'hanged for new debt.
0n the ter&s of issue the Argentina was for'ed to &at'h any i&prove&ent that is 'ondu'ted under the future in
favor of holders that did not enter into swap arrange&ents.
#nder the senten'e, where e/e'utable, Argentina will have, at least, two options1
"epur'hased outstanding debt, issued under #.+. (urisdi'tion, and
'o&plete the pay&ents due by the (udg&ent.
2e'lare a new default on outstanding debt, issued under #.+. (urisdi'tion
0t is 'lear that Argentina is not in a position to pay 'ash all of the debt issued under #.+. (urisdi'tion
)here is, statisti'ally, a low probability that the +, respe'ting an analysis of the 'ase.
A''ording to Credit ar!et Anal"sis #td $CA%, there is a 36.*4 'han'e that the Argentina de'lares a new
default within the ne/t five years !'al'ulated at 161*0 5+), on August 2*, 201* and based on ,2+ .uotes to
years%