• 26 Jun 2014 at 12:48 PM

Surprise: Argentina Has A Caveat!

The uniquely recalcitrant debtor is happy—eager, even—to chat with Paul Singer and friends about resolving their little situation, Economy Minister Axel Kicillof says. Not eager enough for Kicillof to stick around for a couple of days to chat, but all the same.

Oh yea, and one more thing: Ignore all of the above if a judge won’t give Argentina the stay it needs to pay some of its bills and not default on Monday.

He said earlier Wednesday in a speech to ambassadors of the Group of 77 countries and China that Argentina is prepared to negotiate “in good faith” with the holdout creditors in a standoff over the nation’s defaulted debt, although he appeared to imply that Argentina won’t negotiate until it is granted extra time by the courts.

He said he met with Argentina’s lawyers during his brief visit to New York but has no plans to meet with the holdouts before he returns to Buenos Aires Wednesday night….

“What we’re asking is we not just have three days and run the risk of defaulting,” Mr. Kicillof said on Wednesday.

Without extra time, Mr. Kicillof said “it will not be possible in such a short time to bear in mind all factors and risks involved in any decision made by Argentina.”

Mr. Kicillof declined to elaborate on where Argentina would be willing to compromise with holdouts, but he said the country is “willing to evaluate all options bearing in mind legal obligations.”

Of course, as Aurelius Capital Management’s Mark Brodsky points out, you can’t really take any Argentine government official at their word vis-à-vis matters sovereign debt. The International Swaps and Derivatives Association concurs.

Lawyers representing the holder of Argentine credit default swaps had written to ISDA last Friday asking whether Argentine economy minister Axel Kicillof’s claims on June 18 that it would be “impossible” for the country to make debt payments this month would trigger a clause in the contract that would allow it to cover that potential default.

ISDA, which determines whether defaults or other events that trigger insurance-type payouts have occurred, had until 5pm New York time Tuesday to decide whether to accept the question. Its website Wednesday notes that the question has been rejected.

Argentina Waiting for Ruling on Request for More Negotiating Time [WSJ]
Holder of Expired Argentine Debt Contract Refused Extension Bid [WSJ]

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