Stiglitz sees ‘significant haircuts’ for Argentina's debt

[Rich One]

Interestingly Pino Solanas has switched sides and was with "Frente para Todos" (the current government's alliance) in the last elections. Go figure ...

Interestingly Pino Solanas has switched sides and was with "Frente para Todos" (the current government's alliance) in the last elections. Go figure ...
[/QUOTE]

Very much so he quit as Diputado and now designated as Ambassador to UNESCO..!

Pino Solanas irá como embajador a la Unesco

El diputado electo por el Frente de Todos confirmó que Alberto Fernández le ofreció "una tarea de gobierno" y será reemplazado por Eduardo Valdes.

www.tiempoar.com.ar

 

[Ries]

Guess there are always different versions.... ! La Nación version, as expressed by Nestor kirchner on Dec 16, 2005. I may have misread this information?


"Argentina will pay to the IMF in advance the total amount owed of 9810 million dollars," said the President with emphasis and jubilant content. In the Casa Rosada

Histórico: el país saldará en un solo pago la deuda con el FMI

Kirchner afirmó que antes de fines de año se pagarán 9810 millones de dólares, con reservas del Banco Central; el monto representa algo menos del 9% de la deuda total del país; hace tres días Brasil había hecho lo mismo; el Presidente dijo que tomó la medida para "ganar libertad"; el FMI elogió...

www.lanacion.com.ar

this article clearly states that Kirchner negotiated it down by "67,000 million dollars" earlier that year. Meaning he paid the total amount AFTER he struck a deal to give the owners of the debt a haircut. That is what a "haircut" means- you get paid less than the face value or the debt. The 9810 million dollars was less than the face value by quite a bit.

 

[Rich One]

this article clearly states that Kirchner negotiated it down by "67,000 million dollars" earlier that year. Meaning he paid the total amount AFTER he struck a deal to give the owners of the debt a haircut. That is what a "haircut" means- you get paid less than the face value or the debt. The 9810 million dollars was less than the face value by quite a bit.

We are talking only of the IMF debt , was not down to $67 billion dollars ?? . The Total IMF debt was $ 9810 million dollars and was paid in full as stated Clearly in the article...! If you want to believe otherwise you are free to do so...!

We fully understand what a haircut means..!

 

[Weyland]

NK paid the full debt owed to the IMF, and negotiated a "haircut" with bond holders of their sovereign debt. Kiciloff is showing why AF is no fan of his. I believe that AF is far more crafty than Kiciloff and will handle the debt situation more delicately.

 

[TheDonald]

History has shown that all previous Argentine debt got serious haircuts. Why wouldnt it happen again? And how would paying all debt at face value be "a help" as compared to paying less? Seems to me like Argentina would benefit a lot if it paid, say, $30 Billion in USD , as opposed to $150 Billion.

In most cases, a sovereign default is an enormously negative event. So from a cost/benefit analysis, it benefits the sovereign to pay the debt in full. The costs come in the form of intangible restrictions to international markets, an awful reputation among investors (which results in very difficult future debt issuances and lower credit ratings), a plunging domestic currency, crippled domestic enterprises, to name a few.

In Argentina, most of those costs have already been borne to full, so I agree with Reis that it makes more sense for Argentina to repay the principal at a significant discount. No one expects any different - the Argentine century bonds have been trading below 45 pretty much since the PASO.

 

[TheDonald]

We are talking only of the IMF debt , was not down to $67 billion dollars ?? . The Total IMF debt was $ 9810 million dollars and was paid in full as stated Clearly in the article...! If you want to believe otherwise you are free to do so...!

We fully understand what a haircut means..!

You both are right, you are just talking about different debt issuances. Try a more reliable source than lanacion:

Argentina: Political and Economic Conditions and U.S. Relations

Argentina’s restructuring of over $100 billion in defaulted bond debt in June 2005 demonstrated the country’s emergence from its...

www.everycrsreport.com

However, the $67 billion haircut, or discount to face value, was calculated prematurely. If memory serves, this was the debt series that was subject to the SDNY court proceedings under Judge Griesa. The settlement Nestor negotiated was not in accordance with the terms of the indenture and therefore was subject to legal action by the investors. As we all know, Cristina defaulted on the adverse judgment and Macri ended up paying out about $6B-$8B more. So Nestor really negotiated a discount of about $55B.

 

[lost]

The really sad thing is that a lot of those borrowed dollars were spent on financing the capital flight / keeping the Argentinian Peso exchange rate up. Money lost.

 

[Weyland]

The really sad thing is that a lot of those borrowed dollars were spent on financing the capital flight / keeping the Argentinian Peso exchange rate up. Money lost.

Complete incompetence by Macri and his team.

 

[Rich One]

You both are right, you are just talking about different debt issuances. Try a more reliable source than lanacion:

Argentina: Political and Economic Conditions and U.S. Relations

Argentina’s restructuring of over $100 billion in defaulted bond debt in June 2005 demonstrated the country’s emergence from its...

www.everycrsreport.com

However, the $67 billion haircut, or discount to face value, was calculated prematurely. If memory serves, this was the debt series that was subject to the SDNY court proceedings under Judge Griesa. The settlement Nestor negotiated was not in accordance with the terms of the indenture and therefore was subject to legal action by the investors. As we all know, Cristina defaulted on the adverse judgment and Macri ended up paying out about $6B-$8B more. So Nestor really negotiated a discount of about $55B.

Nevertheless, Nestor paid the IMF in full , i may sound repetitive ..! He negotiated other debt series as we all know...! and may have negotiateD a discount..!