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This article was published on 2 February 2016 at 12:32.
The last change is the February 2, 2016 at 17:45.
A win Italian investors came 14 years after the default of 2001. It ended the dispute between Argentina and more than 50 thousand who had invested $ 900 million in “Tango Bond” and that they had accepted the two subsequent restructuring in 2005 and 2010. With a bilateral agreement between the executive and the preliminary Tfa (the task force banks) the government of Buenos Aires agreed to pay in cash 150% of the capital for a value of 1.35 billion. The agreement is subject to approval by the Argentine Congress.
The Treasury of Buenos Aires, announces the ABI, and TFA have reached preliminary agreement “to resolve the dispute based on the bilateral Italy-Argentina in the arbitration at the ICSID tribunal Bank world in which it is required to pay damages for breach of rights arising under international law to about 50 thousand retail bondholders Italian holders of about $ 900 million of Argentine bonds in default represented by TFA. ”
The agreement says the banking association, “is a result of negotiations between Argentina and the Tfa aimed at the conclusion of the long-matter and marks a significant step forward in the resolution of sovereign debt problems of ‘Argentina’. The agreement is also “an opportunity of a reasonable compensation for the bondholders represented by Tfa who invested in Argentine bonds before the default in December 2001.”
Argentina then “will define all requests based on international law relating to the bonds in default held by individuals represented by TFA for a cash payment equal to 150% of the original principal of these bonds. ” This, according to estimates by the Sole 24 Ore, is equivalent to an average annual gross return of 2.74 percent; Whereas in the period 2001-2015, average inflation in Italy was 1.9% or so, the agreement signed today provides a net annual yield of 0.82% to 50 thousand Italian investors interested.
The majority of Italian investors – 450,000 in all – had instead accepted at the time the exchange with the new Argentine bonds, an operation that had involved an insignificant capital loss. The Task Force Argentina, led by Nicola Stock, then collects a major victory. The bilateral negotiations with the new government of Mauricio Macri has speeded up the time, without waiting for the timing of the international tribunal ICSID, an agency of the World Bank.
“We are very pleased – said the secretary of Finance Argentine Luis Caputo – had reached a preliminary agreement which is the first step in the normalization of relations between Argentina and the international financial markets.” The preliminary agreement, according to ABI, then opens the way for “a strengthening of the strong ties between Argentina and Italy, as well as investments between the two countries.”
“I hope that, after the green light by the Argentine Congress and the definition of the legal issues can reasonably get to a payment to our investors towards May or June – said the president of Nicholas Tfa stock – It is important that it be in cash because many bondholders are elderly and have been waiting for many years. ” After 14 long years we are pleased to see this story end so as to lead to a fair resolution requests the Italian bondholders. “
The agreement is subject to approval by the Argentine Congress, which will be convened by next March 1, but the statements of the Minister of Finance Argentina suggest that the road has been cleared.
The agreement with Italian investors is 30% of the total of the deal with US funds (the so-called vulture funds), where instead there was black smoke. Luis Caputo returned from New York after meeting representatives unsuccessfully Funds Elliot Management, Aurelius Capital, Bracebridge Capital, Montreux Partners, Dart Management and Davidson Kempner.
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