Thieving Argentina's One-Sixth Bond Offer Seen as ‘Thumbing Nose’

Argentina, which defaulted on a record $95 billion in sovereign debt in 2001, proposed giving holders of $1.3 billion of the repudiated bonds about one-sixth of what a U.S. judge has said they’re entitled to receive--a move one analyst called “thumbing its nose at the court.”

The country’s filing of its proposed plan yesterday, one hour before a deadline set by the court weeks ago, paves the way for the U.S. Court of Appeals in New York to rule in a case in which a group of creditors, led by hedge fund Elliott Management Corp.’s NML Capital Ltd., seek to force the South American nation to pay after more than a decade of litigation.

Argentina said it proposes two possibilities for bondholders to exchange their defaulted debt for new bonds. Argentine officials will submit a bill to their nation’s Congress to provide for the plan to be implemented, the government said in a 22-page letter filed in court.

“After taking the full month available to work on its response, Argentina came back last night with a proposal for exactly the same package that it had offered back in 2010,” Joe Kogan, head of emerging-market debt strategy at Scotia Capital Markets, said in a note this morning. Kogan said he expects the country’s bonds to fall tomorrow “upon news of Argentina’s continued intransigence.” He added: “The proposal itself appears intended for local Argentine consumption as the government seeks to reiterate once again that it will not pay holdouts more than what Argentina gave to exchange bondholders.”

More: http://www.bloomberg.com/news/2013-03-30/argentina-one-sixth-bond-offer-seen-as-thumbing-nose-.html

Thieving Argentina's One-Sixth Bond Offer Seen as ‘Thumbing Nose’

Thieving Argentina's One-Sixth Bond Offer Seen as ‘Thumbing Nose’

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