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Argentina Still Relying On Guile To Avoid Defaulting, Paying Paul Singer

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Ex-IMF director Claudio Loser says that his fellow Argentines “have always thought that we are more clever than the rest of the world.” Unfortunately for President Cristina Kirchner, every single federal judge in the U.S. appears to disagree.

But Kirchner is undeterred: She’s got a new plan that involves saying one thing, running full-page ads proclaiming another, and playing for enough time to get out of the deals that she and her husband worked out with the suckers who took a 70% haircut not to then screw them over by making a better deal with the hedge fund monsters/negotiating partners, not defaulting, and then probably refusing to pay the holdouts anyway!

La Nacion newspaper cited unnamed government officials as saying President Cristina Fernandez was considering paying these holdout creditors between $300 million and $400 million as a sign of good faith.

"The initial sum would be equivalent to a 65 percent reduction compared with what was paid to restructured bondholders who entered the 2005 and 2010 swaps," La Nacion quoted a government official as saying.

The Argentine government would then seek to extend negotiations and in 2015 to clinch a payment deal in the form of long-term bonds, similar to deals reached with the Paris Club or Spain's Repsol, the paper added…..

A provision called Rights upon Future Offers (RUFO), which expires on Dec. 31, precludes Argentina from voluntarily agreeing better terms with the holdouts, complicating negotiations this year….

"Officializing (a deal) in January would allow for the end of the RUFO clause," La Nacion quoted a government source as saying. "We depend on (U.S. District Court Judge Thomas) Griesa."

Paul Singer’s buddies over at Aurelius Capital Management aren’t exactly depending on Cristina Kirchner, no matter what she says.

"It does not matter what Aurelius would accept at next week's settlement meeting, because we do not believe Argentina has any intention of having that meeting," said Aurelius Capital Management LP chairman Mark Brodsky.

Argentina mulls initial payment to holdout creditors, final deal in 2015-newspaper [Reuters]
Argentina Bonds Rally as Fernandez Says Debt Talks Are On [Bloomberg]
In U.S. media, Argentina slams holdout creditors and court rulings [Reuters]
Holdout Creditor Says It’s Ready to Negotiate With Argentina [WSJ]


Memo To Argentina: Paul Singer Is Unbowed

Does Paul Singer look like the kind of hedge fund manager who will accept a 25% haircut?