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Argentina Finds Relentless Foe in Paul Singer's Hedge Fund
Keywords:
Paul Singer, head of hedge fund firm Elliott Management and its unit NML Capital, has relentlessly pursued a case in U.S. courts involving collecting full payment on bonds from the Argentine government after its default on the bonds in 2001. Singer bought bonds with face value of about $170 million according to legal filings, but paid a price well below the original value. Elliott and other investors are now seeking $1.5 billion, including unpaid interest. Judge Griesa's ruling in a federal court in Manhattan blocks Argentina from paying bondholders who accepted an agreement for about 25 cents on the dollar from being paid $530 million in interest in July 2014. Argentina has to consider other risks in settling the dispute as more than the $1.5 billion as a one off payment is involved, because as Stevenson points out in another article (see link), the payment could run from $15- $27 billion depending on whether it then has to pay all holdout bondholders or all exchange and holdout bondholders at a higher rate. The result is an intractable dispute beyond the statement of honoring creditor rights, seen by a debtor country facing difficult finances in a different light. Serving as a reminder for Greece, Argentina, and other countries with chronic borrowing and debt history about the need for care and constant vigilance on state finances. In May 2012 Greece paid over $436 million in a one off payment to holdout bondholder financial firm Dart Management in a similiar bind, even as pensions were being cut and Greeks protested daily on Athens streets with over 20% unemployment (see link).
Argentina's compensation for creditors after earlier debt restructurings and default following 2001 debt crisis
04/01/2013
Grouped Articles
New Chapter in a Clash Over Bonds in Argentina
New York Times 09/11/2013
The Influential Minister Behind Argentina’s Economic Shift
New York Times 01/26/2014
As Talks Falter, Argentine Bond Default Likely
New York Times 07/29/2014
Argentina Finds Relentless Foe in Paul Singer's Hedge Fund
New York Times 07/30/2014
Argentina Is in Default, and Also Maybe in Denial
New York Times 07/31/2014
Argentine Leader Defies Wall Street for Main Street
Wall Street Journal 08/01/2014
Argentina's likely default on bonds in 2014
07/29/2014
Grouped Articles
As Talks Falter, Argentine Bond Default Likely
New York Times 07/29/2014
Argentina Finds Relentless Foe in Paul Singer's Hedge Fund
New York Times 07/30/2014
Argentina’s New Debt Offering Drawing Strong Demand
Wall Street Journal 04/19/2016
Argentina's government bonds- 2012-2015
09/11/2013
Grouped Articles
New Chapter in a Clash Over Bonds in Argentina
New York Times 09/11/2013
Argentina's Woes Push Investors Away
Wall Street Journal 01/14/2014
Erosion of Argentine Peso Sends a Shudder Through Latin America
New York Times 01/24/2014
Wall Street Journal 06/17/2014
Argentina Waiting for Ruling on Request for More Negotiation Time
Wall Street Journal 06/26/2014
The Muddled Case of Argentine Bonds
New York Times 07/24/2014
The holdout bondholders led by Mr. Singer of Elliott Capital hedge fund and Argentina- the two sides in the Argentine default
07/30/2014
Mr. Singer's hedge fund paid about $170 million for Argentine bonds acquired at a price well below the original value of the bonds following the debt crisis of 2001. He is suing the Argentine government for $1.5 billion including interest. His hedge fund firm manages $25 billion in assets and has returned 14% over the years. The long period this issue has festered should convince borrowers of the need to borrow carefully only where the capital can be put to productive use and generate adequate returns to pay off borrowings. Sovereign borrowers also need to build up the sovereign wealth funds to prepare for unforeseen contingencies and exercize vigilance in spending. Greece had a similar problem and paid a financial firm over $500 million to get out of a difficult situation in 2012, even as pensions were being cut.
Grouped Articles
Argentina Finds Relentless Foe in Paul Singer's Hedge Fund
New York Times 07/30/2014
Argentina Is in Default, and Also Maybe in Denial
New York Times 07/31/2014
Argentine Leader Defies Wall Street for Main Street
Wall Street Journal 08/01/2014
After 14 Years at Odds, Argentina Aims to Settle Debt With Hedge Funds
New York Times 02/02/2016
Argentina Reaches Debt Deal With 2 Hedge Funds
New York Times 02/05/2016
Argentina, Hedge Funds Move Closer to Reaching Deal in Debt Dispute
Wall Street Journal 02/25/2016
The $436 million payment by Greece to holdout bondholder Dart Management and the $1.5 billion demanded by holdout bondholder Elliott Management leading to Argentine default in 2014
05/15/2012
Greece made the payment to Dart Management at a time of 20% unemployment and daily protests on Athens streets, a month before elections in June 2012. Greece only did this as a last resort for release of EU funds that were being held up to make pament of interest on debt. This exacerabated discontent inside Greece as pensions were being cut and layoffs taking place, including increase in electricity bills. The Syriza party made gains in that election and the two main parties lost ground to other parties, including a violent anti-immigrant party. Argentina's Christina Kirchner faces a difficult time with the unions and centrist parties in Buenos Aires province, with a shortage of cash and sovereign wealth fund down to $29 billion in May 2014. Stevenson points out the payment to Elliott Management could lead to a situation where Argentina owed $15-$27 billion to all holdout and exchange investors in its bonds.
Linked Articles
Argentina Finds Relentless Foe in Paul Singer's Hedge Fund
New York Times 07/30/2014
Bet on Greek Bonds Paid Off for a Vulture Fund
New York Times 05/15/2012
Holdout bondholder Paul Singer of Elliott Management and Christina Kirchner of Argentina- the two sides in a dispute leading to Argentine default on its bonds in 2014
07/29/2014
Linked Articles
Argentina Finds Relentless Foe in Paul Singer's Hedge Fund
New York Times 07/30/2014
As Talks Falter, Argentine Bond Default Likely
New York Times 07/29/2014
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