sovereign debt restructurings. the case of … · sovereign debt restructurings. the case of...
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Widespread international supportWidespread international support
Concern regarding ruling's systemic consequencesConcern regarding ruling's systemic consequences
Countries
Brazil
France
Fora
IMF
UNCTAD
Experts
Joseph Stiglitz
Nouriel Roubini
Additional
support
Jubilee USA
Euroclear Bank
3
Mexico
USA
UK (106 MP)
Uruguay
MERCOSUR
UNASUR
CELAC
ALBA
Anne Krueger
Ha-Joon Chang
Mark Weisbrot
Cephas Lumina
Fintech Advisory
The Bank of NY
Mellon
Euro Bondholder
Exchange
Bondholder
Widespread international supportWidespread international support
Concern regarding ruling's systemic consequencesConcern regarding ruling's systemic consequences
Countries
Bolivia
Venezuela
Ecuador
Fora
ECLAC
Andean Parliament
G77+China
Experts
José Antonio
Ocampo
Felix Salmon
Additional
support
Clearing House
American Bank
Association
Caja de Valores
4
Ecuador
Cuba
Chile
G77+China
G24
ASA (Africa-South
America
Cooperation Forum)
Bank of the South
Martin Wolf
Martin Khor
Emir Sader
Caja de Valores
Puente Hermanos
Argentine-American
Chamber of
Commerce
International and regional organizations and foraInternational and regional organizations and fora
Concern regarding ruling's systemic consequencesConcern regarding ruling's systemic consequences
“[…]“[…] ongoing litigation against Argentina ongoing litigation against Argentina
could have pervasive implications for future could have pervasive implications for future
sovereign debt restructurings.“sovereign debt restructurings.“
IMF IMF (188 countries)(188 countries)06/20/201406/20/2014
“[…] that the “[…] that the behavior of these speculative behavior of these speculative
“[…] The ruling does not only impact the “[…] The ruling does not only impact the
financial service providers involved, it also financial service providers involved, it also
severely erodes sovereign immunity”severely erodes sovereign immunity”
UNCTAD UNCTAD (194 countries)(194 countries)06/25/201406/25/2014
““[…] […] Presidents of the States Parties of Presidents of the States Parties of
5
“[…] that the “[…] that the behavior of these speculative behavior of these speculative
agents does not agents does not […][…] riskrisk the the
globalglobal financialfinancial stability.stability.” ”
UNASUR UNASUR ((12 countries)12 countries)11/30/201211/30/2012
“[…]“[…] we reiterate the importance of not we reiterate the importance of not
allowing vulture funds to paralyze the debtallowing vulture funds to paralyze the debt--
restructuring effortsrestructuring efforts” ”
G77+China G77+China ((133 countries)133 countries)06/15/201406/15/2014
““[…] […] Presidents of the States Parties of Presidents of the States Parties of
MERCOSUR express their absolute rejection of MERCOSUR express their absolute rejection of
the attitude of these Funds.”the attitude of these Funds.”
MERCOSUR MERCOSUR (6 countries)(6 countries)06/21/201406/21/2014
“[…] These speculative funds pose latent and “[…] These speculative funds pose latent and
actual danger to all countries in the world, for actual danger to all countries in the world, for
they attack national economies.”they attack national economies.”
ALBA ALBA (9 countries)(9 countries)06/24/201406/24/2014
International and regional organizations and foraInternational and regional organizations and fora
Concern regarding ruling's systemic consequencesConcern regarding ruling's systemic consequences
“[…] this is a test case for the international “[…] this is a test case for the international
community […] which reveals a legal vacuum community […] which reveals a legal vacuum
that should lead to the reform of international that should lead to the reform of international
norms”norms”
ECLAC ECLAC (44 countries)(44 countries)06/26/201406/26/2014
““Consider it essential […] to ensure that Consider it essential […] to ensure that
agreements reached between debtors and agreements reached between debtors and
creditors are respected.” creditors are respected.”
CELACCELAC ((33 countries)33 countries)01/29/201401/29/2014
“[…] “[…] we emphasize the need to limit the we emphasize the need to limit the ““The Andean Parliament declares its full The Andean Parliament declares its full
6
“[…] “[…] we emphasize the need to limit the we emphasize the need to limit the
actions of the vulture funds”actions of the vulture funds”
ASA ASA ((66 countries)66 countries)02/22/201302/22/2013
““The Andean Parliament declares its full The Andean Parliament declares its full
support to its sister republic of Argentina in its support to its sister republic of Argentina in its
dispute with the speculative funds.”dispute with the speculative funds.” Andean Andean Parliament Parliament (4(4 countries)countries)
06/27/201406/27/2014
“[…] “[…] The Bank of the South strongly rejects The Bank of the South strongly rejects
the actions of these minor groups whose the actions of these minor groups whose
attitude […] threatens the financial stability of attitude […] threatens the financial stability of
countries. ”countries. ”
Bank of the South Bank of the South ((7 countries)7 countries)07/02/201407/02/2014
Concern regarding ruling's systemic consequencesConcern regarding ruling's systemic consequences
FranceFrance MexicoMexico BrazilBrazil
Amicus curiae Amicus curiae and filings before the U.S. Supreme Courtand filings before the U.S. Supreme Court
Joseph
7
JubileeJubilee USAUSA
Argentine-American
Chamber of CommerceEuroclear BankEuroclear Bank
Euro
Bondholders
Joseph
StiglitzCaja de Valores
Exchange
Bondholder
Group
Fintech
Advisory
Puente
Hermanos
American
Bankers
Association
The
Clearing
House
Additional international supportAdditional international support
Concern regarding ruling's systemic consequencesConcern regarding ruling's systemic consequences
“[…] we are at the gates of a financially “[…] we are at the gates of a financially
intensive immoral war.”intensive immoral war.”
Evo Morales Evo Morales
“Starting with the countries of the region, we “Starting with the countries of the region, we
have to invent something to support have to invent something to support
Argentina, providing it with a bumper.”Argentina, providing it with a bumper.”
José MujicaJosé Mujica
8
“[…] “[…] this House […] disagrees with the Court's this House […] disagrees with the Court's
decision to prioritise the greed of vulture decision to prioritise the greed of vulture
funds over the Argentinian people's funds over the Argentinian people's
sovereigntysovereignty””
106 UK 106 UK Members of ParliamentMembers of Parliament06/18/201406/18/2014
Evo Morales Evo Morales 06/23/2014 06/23/2014
““The district court’s interpretation of the The district court’s interpretation of the pari pari
passupassu provision could enable a single creditor provision could enable a single creditor
to thwart the implementation of an to thwart the implementation of an
internationally supported restructuring planinternationally supported restructuring plan””
USA USA (before NY Court of Appeals)(before NY Court of Appeals)
04/04/201204/04/2012
José MujicaJosé Mujica06/22/201406/22/2014
Additional international supportAdditional international support
Concern regarding ruling's systemic consequencesConcern regarding ruling's systemic consequences
“[…] we will resist this unfair world order or even “[…] we will resist this unfair world order or even
change it, only joined together […]. This is change it, only joined together […]. This is
shown by the Argentine case.”shown by the Argentine case.”
“We are in the presence of a new form of “We are in the presence of a new form of
aggression against the Southern Nations.”aggression against the Southern Nations.”
Cuba’s Ministry of Foreign AffairsCuba’s Ministry of Foreign Affairs06/27/201406/27/2014
9
“[…] “[…] Argentina [fights] against one of the Argentina [fights] against one of the
most horrid mechanisms of financial most horrid mechanisms of financial
speculation […] The sospeculation […] The so--called vulture fundscalled vulture funds””
Nicolás MaduroNicolás Maduro06/27/201406/27/2014
Rafael CorreaRafael Correa06/24/2014 06/24/2014
06/27/201406/27/2014
““We cannot allow speculative agents to put We cannot allow speculative agents to put
at risk the agreements reached between at risk the agreements reached between
debtors and creditors, affecting global debtors and creditors, affecting global
financial stabilityfinancial stability.”.”
MicheleMichele Bachelet Bachelet 07/01/2014 07/01/2014
Experts and scholarsExperts and scholars
Concern regarding ruling's systemic consequencesConcern regarding ruling's systemic consequences
““The recent court rulings […] have very The recent court rulings […] have very
serious consequences that go far beyond serious consequences that go far beyond
Argentina.Argentina.””
Nouriel Roubini Nouriel Roubini 11/28/201211/28/2012
““A recent decision by a US appeals court A recent decision by a US appeals court
““These consequences would be felt by debtor These consequences would be felt by debtor
nations, creditors, the United States, and the nations, creditors, the United States, and the
international economy as a whole.international economy as a whole.” ”
Anne Krueger Anne Krueger 04/01/201304/01/2013
““In the Argentinian case, we are risking not In the Argentinian case, we are risking not
10
““A recent decision by a US appeals court A recent decision by a US appeals court
threatens to upend global sovereign debt threatens to upend global sovereign debt
markets.markets.” ”
Joseph Stiglitz Joseph Stiglitz 09/04/201309/04/2013
““Most experts agree that the appellate court Most experts agree that the appellate court
ruling would have a destabilizing effect on ruling would have a destabilizing effect on
international financial markets.international financial markets.” ”
Mark WeisbrotMark Weisbrot06/22/201406/22/2014
““In the Argentinian case, we are risking not In the Argentinian case, we are risking not
just an end to Argentina's recovery but a fresh just an end to Argentina's recovery but a fresh
round of turmoil in the global financial round of turmoil in the global financial
market.market.””
HaHa--Joon Chang Joon Chang 11/25/201211/25/2012
““Argentina has made important progress in Argentina has made important progress in
improving the social conditions […]. Vulture improving the social conditions […]. Vulture
funds […] must not be allowed to derailfunds […] must not be allowed to derail
that progress.”that progress.”
Cephas Lumina (ONU)Cephas Lumina (ONU)04/02/201404/02/2014
Experts and scholarsExperts and scholars
Concern regarding ruling's systemic consequencesConcern regarding ruling's systemic consequences
““The The ruling will make it more difficult for ruling will make it more difficult for
countries to free themselves from the burden countries to free themselves from the burden
of overof over--indebtedness. It will be very bad for indebtedness. It will be very bad for
international capital markets and it will also international capital markets and it will also
diminish national sovereignty.diminish national sovereignty.””
Felix Salmon Felix Salmon
““If Argentina is forced to pay holdouts in full, If Argentina is forced to pay holdouts in full,
the price will be borne by Argentines. This is the price will be borne by Argentines. This is
extortion backed by the US judiciaryextortion backed by the US judiciary..” ”
Martin WolfMartin Wolf06/24/201306/24/2013
11
Felix Salmon Felix Salmon 06/24/201406/24/2014
““Experts agree that the impact will have Experts agree that the impact will have
detrimental effects and not only for detrimental effects and not only for
Argentina.Argentina.” ”
Martin Khor Martin Khor 06/20/201406/20/2014
““The crisis of capitalism, which dates back to The crisis of capitalism, which dates back to
2008, caused a lot of countries to have 2008, caused a lot of countries to have
extremely severe debts to pay; Argentina is extremely severe debts to pay; Argentina is
seen as an example of how to get out of those seen as an example of how to get out of those
situations.situations.””
Emir Sader Emir Sader 06/18/201406/18/2014
808 847980
1.489
2.658
EMBI+EMBI+
VultureVulture FundsFunds' ClaimClaim
Bonds Bonds IssuanceIssuance at at thethe VergeVerge of of CollapseCollapse
Country Risk
Argentina
Towards the collapse of Convertibility
model, the Risk Premium on Argentine debt
grew exponencially, implying a growing
probabilty of default.
1999 2000
2001
13
686 808
622 552651 671
811 847980
712
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
02-12:
690 bp
02-25:
678 bp
04-07:
690 bp
04-22:
623 bp
11-22:
592 bp
02-01:
541 bp
02-25:
543 bp
03-15:
532 bp
06-15:
715 bp
02-07:
720 bp
02-28:
678 bp
03-30:
758 bp
01-31:
656 bp
06-19:
846 bp
06-19:
1078bp
06-19:
920 bp
04-18:
745 bp
06-20:
866 bp
Bonds Issuance date and
spread over US Treasury :
GrossGross ReturnReturn onon PublicPublic DebtDebt
InvestingInvesting USD 100 USD 100 onon SovereignSovereign DebtDebt in 1976in 1976
USD 100
2001
USD 800
1976
14
USD 800
USD 4,700
2001
FinancializationFinancialization ageage
SovereignSovereign DebtDebt RestructuringRestructuring ProcessProcess
ThereThere isis aa commoncommon historyhistory ofof defaultsdefaults eveneven inin richrich countriescountries.. ThereThere waswas aa significativesignificative
reductionreduction ofof thesethese episodesepisodes inin postpost--warwar eraera butbut,, duringduring thethe actualactual financializationfinancialization ageage,, defaultsdefaults
camecame backback..
SovereignSovereign defaults and defaults and SovereignSovereign DebtDebt
RestructuringsRestructurings
aas % of s % of countriescountries
1802, 1868, 1914,
1932, 1938, 19401935
1828, 1898, 1914, 19
31, 1937, 1961, 1964
, 1983, 1990
1921, 1939
Financialization
15
1850, 1932, 19481958, 1969, 1972
1940
1942-1952
1828, 1833, 1844,
1854, 1867, 1914,
1928, 1982
1841, 1873, 1933
1876, 1915, 1931,
1940, 1959, 1965,
1978, 1982, 2001
1932
1809, 1820, 1824,
1837, 1877, 1936,
1839, 1885, 1917,
1947, 1957, 1991,
1998
300%
350%
400%
WorldWorld debtdebt growthgrowth comparisoncomparison
% % betweenbetween 20022002--20122012DebtDebt growthgrowthArgentinaArgentina isis oneone ofof thethe countriescountries thatthat achievedachieved aa majormajor debtdebt reductionreduction betweenbetween 20022002 andand
20122012.. TheThe DebtDebt/GDP/GDP ratioratio forfor ArgentinaArgentina ratioratio fellfell 7373%%,, whilewhile forfor thethe averageaverage ofof thethe selectedselected
countriescountries therethere waswas anan increaseincrease ofof 3838,,11%%..
GovernmentGovernment grossgross debtdebt% % changechange of of DebtDebt/GDP ratio /GDP ratio
-72,50%-100%
-50%
0%
50%
100%
150%
200%
250%
Luxe
mb
ou
rg
Ire
lan
d
Latv
ia UK
Po
rtu
ga
l
Slo
ven
ia
Un
ite
d S
tate
s
Au
stra
lia
Lith
ua
nia
Spa
in
Gre
cee
Fra
nce
Cze
ch R
ep
Jap
an
Est
on
ia
Ro
ma
nia
Wo
rld
AV
G
Ge
rma
ny
Cyp
rus
Ho
lan
d
Hu
ng
ary
Po
lan
d
Fin
lan
d
Ita
ly
Ma
lta
Ch
ina
Au
stri
a
Ve
ne
zue
la
Ca
na
da
Slo
vaki
a
Be
lgiu
m
De
nm
ark
Me
xico
Swit
zerl
an
d
Ind
ia
Bra
zil
Ch
ile
Swe
de
n
Co
lom
bia
Pa
na
ma
Pe
ru
Ecu
ad
or
Bu
lga
ria
Arg
en
tin
a
EAE La Deuda Pública 2013
The vicious circle of vulture fundsThe vicious circle of vulture funds
COUNTRY OVERLEVERAGED AND INSOLVENT
DEFAULT
FUNDS PURCHASE DEBT AT LOW PRICE
18
RESCHEDULING AND DEBT SWAP
MAJORITY ACCEPTANCE
DEBT RELIEF
VULTURE FUNDS
PeruPeruFurtherFurther ExperiencesExperiences
VultureVulture EarningsEarnings
Default 1992Default 1992
RestructuringRestructuring 19951995
1996 NML 1996 NML ElliottElliott buysbuys securitiessecurities inin default.default. 180 eligible creditors, only 2 180 eligible creditors, only 2
litigated.litigated.
Peru loses judicial dispute in the Court of New YorkPeru loses judicial dispute in the Court of New York
NML NML ElliottElliott
19
NML NML ElliottElliott
BoughtBought defaulteddefaultedsecuritiessecurities forfor USD 11,4 USD 11,4 millionsmillions
CollectedCollectedUSD 58,4 USD 58,4 millionsmillions
GainGain of of 400%400%
CongoCongoFurtherFurther ExperiencesExperiences
Elliott bought defaulted titles from Congo for a nominal value of USD 30 Elliott bought defaulted titles from Congo for a nominal value of USD 30
million.million.
ELLIOTTELLIOTT
VultureVulture EarningsEarnings
20
BoughtBought securitiessecurities forfor nearlynearlyUSD 2,6 USD 2,6 millionsmillions
Gets in United Kingdom Gets in United Kingdom judgment for more than judgment for more than USD 100 millions.USD 100 millions.
Seizes oil exports for Seizes oil exports for USD 39 millionsUSD 39 millions
GainGain ofof
1400%1400%
GreeceGreeceFurtherFurther ExperiencesExperiences
2012 Dart buy Greek bonds prior to the restructuring of its debt (March 2012).2012 Dart buy Greek bonds prior to the restructuring of its debt (March 2012).
The restructuring is accepted by 97% of the creditors.The restructuring is accepted by 97% of the creditors.
DARTDART
VultureVulture EarningsEarnings
21
Buy assets amounting close to Buy assets amounting close to €€283 millions.283 millions.
Refuses the Exchange Refuses the Exchange and charge and charge €€435 435 millionSmillionS..
GainGain of of
53,8% 53,8% BetweenBetween MarchMarchand and MayMay 20122012
GriesaGriesa´́ss OrderOrder
A A ThreatThreat to to ArgentinaArgentina´́ss SuccessfulSuccessful DebtDebt RestructuringRestructuring
22
Argentine debt historyArgentine debt history
Colapso Convertibilidad (2001/2)
60.000
70.000
80.000
90.000
100.000
80
100
120
Argentine Public Foreign Debt (1824-2002)
Convertibility Collapse (2001/02)
Hyperinflation (1989)
Public Debt Loan
(Sarmiento’s
Debt Restructuring
“Romero’s Settlement”
+ Provincial Debt
Consolidation
18241824--20022002Historical EvolutionHistorical Evolution
24
0
10.000
20.000
30.000
40.000
50.000
60.000
0
20
40
60
18
24
18
69
18
74
18
79
18
84
18
89
18
94
18
99
19
04
19
09
19
14
19
19
19
24
19
29
19
34
19
39
19
44
19
49
19
54
19
59
19
64
19
69
19
74
19
79
19
84
19
89
19
94
19
99
En Mill. de USD (eje derecho) En % del PIB
Debt Crisis (1982)
(Sarmiento’s
Government)
1890 Crisis
In Million USD (Right Axis) % GDP
Foreign Debt and UnemploymentForeign Debt and Unemployment
OverOver indebtednessindebtedness waswas notnot onlyonly anan obstacleobstacle forfor growthgrowth butbut alsoalso expelledexpelled workersworkers fromfrom thethe productiveproductive
systemsystem andand broughtbrought aa drasticdrastic increaseincrease inin unemploymentunemployment.. TheThe unemploymentunemployment raterate remainedremained inin doubledouble
digitsdigits (reaching(reaching levelslevels aboveabove 2020%%)) sincesince thethe earlyearly nineties,nineties, whilewhile foreignforeign debtdebt grewgrew steadilysteadily..
Historical ComparisonHistorical Comparison
20
25
80
90
100
110
120
25(*) 2013: Public Debt until III.13
0
5
10
15
0
10
20
30
40
50
60
70
80
19
74
19
76
19
78
19
80
19
82
19
84
19
86
19
88
19
90
19
92
19
94
19
96
19
98
20
00
20
02
20
04
20
06
20
08
20
10
20
12
Public Foreign Debt - In Millions USD Unemployment - % (Right Axis)
19941994--20032003TheThe evolutionevolution of of PublicPublic DebtDebt
ConvertibilityConvertibility
ExternalExternal publicpublic debtdebt**
In In millionmillion USDUSD
102.008
95.000
100.000
105.000
TheThe increaseincrease inin publicpublic sectorsector externalexternal debtdebt waswas permanentpermanent.. DuringDuring thethe TequilaTequila crisiscrisis andand
economiceconomic downturndownturn inin 20012001,, therethere werewere majormajor increasesincreases inin publicpublic debtdebt..
27
60.891
81.153
88.02690.492
60.000
65.000
70.000
75.000
80.000
85.000
90.000
95.000
19
94
19
97
III-
98
II-9
9
I-0
0
IV-0
0
III-
01
II-0
2
I-0
3
IV-0
3
Megacanje
Shield
(Blindaje)
** NonNon--financialfinancial NationalNational PublicPublic SectorSector
ConvertibilityConvertibility
2001 Crisis2001 Crisis
ConsequencesConsequences
TheThe collapsecollapse ofof thethe convertibilityconvertibility generatedgenerated recordrecord levelslevels ofof povertypoverty andand unemploymentunemployment..
TheThe worstworst occurredoccurred inin 20022002 when,when, followingfollowing thethe devaluationdevaluation resultingresulting fromfrom thethe currencycurrency
crisis,crisis, GDPGDP fellfell --1010..99%% andand realreal wageswages shrankshrank --1818..66%% inin comparisoncomparison withwith thethe previousprevious yearyear..
GDP and Real GDP and Real wageswages
AnnualAnnual variationvariation
PovertyPoverty and and UnemploymentUnemployment
In %In %
15% 60%
28
-10,9%
-18,6%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
GDP Real wages
55,3%
24,3%
0%
10%
20%
30%
40%
50%
60%
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
Poverty Unemployment
IMF IMF supportsupport to to overindebtnessoverindebtness• RudigerRudiger DornbuschDornbusch,, ProgressProgress ReportReport onon ArgentinaArgentina ((19951995))::
• “In March 1991, following yet another burst of extreme inflation, the country moved
to a radical stabilization. The programprogram waswas centeredcentered onon thethe “convertibility“convertibility planplan..””…So
far, for more than a year, the promises have been kept. TheThe currencycurrency hashas becomebecome strongstrong
inin thethe sensesense thatthat therethere hashas beenbeen aa majormajor rebuildingrebuilding ofof monetarymonetary assetsassets in the form of
peso currency holdings and bank deposits.”
• LetterLetter fromfrom SS.. FischerFischer toto PresidentPresident MenemMenem ((19991999))::
CommentsComments and and opinionsopinions aboutabout thethe ConvertibilityConvertibility
29
• LetterLetter fromfrom SS.. FischerFischer toto PresidentPresident MenemMenem ((19991999))::
•“Under your leadership, Argentina undertook a transformation of truly historical
proportions. This can never be forgotten. “
•“Nor, I hope, (that) you forget that the IMF was honored to be associated (albeit in a
minority) to these remarkable achievements.”
•Regarding poverty and the deterioration of the income distribution, Fischer said that the
report "makes clear that it should be seen as a consequence of rising unemployment due
to the deterioration of the international context since 1995“.
•“In no point our report -he added- suggests that these problems are new to Argentina
or caused by the policies of your administration“.
SinceSince 20032003 ArgentinaArgentina hashas facedfaced thethe catastrophiccatastrophic consequencesconsequences ofof thethe decisionsdecisions takentaken byby
previousprevious governmentsgovernments andand successfullysuccessfully normalizednormalized thethe situationsituation.. ItIt achievedachieved thethe highesthighest
growthgrowth periodperiod inin thethe lastlast century,century, andand crucialcrucial stepssteps werewere takentaken toto regularizeregularize ourour externalexternal debtdebt
andand implementimplement aa processprocess ofof debtdebt reductionreduction..
SovereignSovereign debtdebt restructuringrestructuring processprocess
20052005--20142014
2005 March: Debt restructuring with private holders. Level of acceptance: 76%.USD 27.057
millions
2006 March: Early debt cancellation with the IMF. USD 9.500 millions.
31
2006 March: Early debt cancellation with the IMF. USD 9.500 millions.
2008September: Paris’ Club. A decree was released that authorized the payment of the
debt.
2009February: Restructuring of secured loans.
September: Restructuring of the debt with CER adjustment.
USD 600
millions
2010 May: Debt restructuring reopening. Accumulated level of acceptance: +92USD 4.347
millions
2013 October: CIADI. Companies agreement with favorable ruling. USD 677 millions.
2014
March: An agreement with REPSOL is reached for the 51% nationalization of YPF.
USD 5.000 millions
May: An agreement is reached with the 19 countries of the Paris’ Club. USD
9.700 millions
Debt in default:
USD 81.836 millions
2001 2005
Accepted therestructuring:
USD 62.318 millions
2010
Canje de deuda 2010
Accepted the
restructuring:
USD 12.862 millions
MilestonesMilestones
SovereignSovereign debtdebt restructuringrestructuring processprocess
32
2001 2005 2010
Around 92,4% of the debt was normalized
TheThe publicpublic debtdebt toto GDPGDP ratioratio waswas reducedreduced fromfrom 166166%% inin 20022002 toto lessless thanthan 4040%% inin 20132013..
InIn 20022002,, overover 9595%% ofof thethe debtdebt waswas ownedowned byby thethe privateprivate sectorsector andand multilateralmultilateral agenciesagencies..
Today,Today, thatthat percentagepercentage hashas droppeddropped toto lessless thanthan halfhalf..
GrossGross PublicPublic DebtDebt
In % of GDPIn % of GDP
20022002--20132013
1,4
1,6
1,8
SovereignSovereign debtdebt restructuringrestructuring processprocess
33
166%
16%
0
0,2
0,4
0,6
0,8
1
1,2
1,4
2002 2013
40%
Net Debt
���� only
10,8% is
owned by
the private
sector
TheThe debtdebt reductionreduction processprocess waswas achievedachieved becausebecause allall debtdebt covenantscovenants werewere paidpaid byby thisthis
GovernmentGovernment.. SinceSince 20032003 debtdebt paymentspayments werewere donedone byby aboutabout 190190,,000000 millionsmillions ofof dollars,dollars, fromfrom
whichwhich overover 100100,,000000 millionsmillions werewere paidpaid inin foreignforeign currencycurrency..
The GDP-linked swaps
DebtDebt servicesservices, 2003, 2003--2013* 2013*
In USD In USD millionsmillions
20032003--20132013DownpaymentsDownpayments
SovereignSovereign debtdebt restructuringrestructuring processprocess
30.000
34* BCRA is excluded. Debt repurchases are included
The GDP-linked swaps
units issued in 2005
and 2010 generated
USD 9,900 millions
payments between
2006 and 2013.
68
9
1.6
72
4.9
33
6.1
53
7.4
31
9.2
23
13
.12
1
9.9
12
8.5
43
9.3
95
12
.71
88.1
14
8.5
39 9
.48
7
7.2
19
8.1
07
8.0
74
8.2
66
10
.85
7 15
.77
6
11
.86
6
9.0
85
-
5.000
10.000
15.000
20.000
25.000
30.000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
In local currency In foreign currency
SovereignSovereign debtdebt sustainabilitysustainability
SustainabilitySustainability indicatorsindicators
Debt sustainability indicators
Ratios 2002 2013
Interests / GDP 3,8% 1,3%
Interests / Government revenue 21,9% 4,9%
Public Debt / GDP 166,4% 39,4%
Foreign Public Debt / GDP 95,3% 11,8%
35
Foreign Public Debt / GDP 95,3% 11,8%
Foreign Debt / Foreign Reserves 12 times 4 times
Foreign Public Debt / Foreign Reserves 836,2% 198,6%
Foreign Public Debt / Exports 300,6% 62,4%
% of total debt in foreign currency 79,1% 62,3%
Average debt maturity 6,1 years 9 years
Date Law Suit Result
October 2009NML and Aurelius attempt to seize USD$ 200 million seize USD$ 200 million
from ANSESfrom ANSESFAILED
July 2010 Creditors try to seize GlobalGlobal BondsBonds ((propertyproperty ofof
Major AttemptsMajor Attempts
Legal actions against ArgentinaLegal actions against Argentina
Attempted Executions and SeizuresAttempted Executions and Seizures
37
July 2010 Creditors try to seize GlobalGlobal BondsBonds ((propertyproperty ofof
Argentina)Argentina) which were deposited in accounts at the
United States
FAILED
April 2011Attempt to seize an Argentine satellite Argentine satellite ARSAT FAILED
May 2011 NML tries to interruptinterrupt aa satellitesatellite launchlaunch in California
manufactured by the CONAE and NASA, to seize parts
of the satellite
FAILED
Date Law Suit Result
June 2011 Action in the Second Circuit to prevent 2010 prevent 2010
RestructuringRestructuringFAILED
July 2010
Major AttemptsMajor Attempts
Legal actions against ArgentinaLegal actions against Argentina
Attempted Executions and SeizuresAttempted Executions and Seizures
38
July 2010 NML and EM attempt to restrict the use of USD$ 105
million of the CentralCentral BankBank internationalinternational reservesreserves
deposited at the Federal Reserve Bank of New York
FAILED
April 2011 Aurelius requests seizures on patents and royalties patents and royalties
from various Argentine agencies FAILED