Case study on Sovereign Debt (Argentina)

Watch this space... should have some impact on Emerging Markets which Russia and Brazil is also part of

"The New York court where Argentina has been fighting its battle to avoid paying a group of hedge fund creditors (known collectively as NML) has ruled that Argentina cannot have another stay of execution. 30 July is inked in red"

http://www.cityam.com/1406103261/argenti...et-30-july

The case is attracting more attention, and becoming a reference for future similar cases...

It might be beneficial to pay attention on the progress...

IMF sees 'substantial costs' of an Argentina default
25 Jul 2014 07:00
[WASHINGTON] The IMF's chief economist warned Thursday that a default by Argentina in its battle with holders of its defaulted debt may hurt its economy and the global financial system.

"If it goes into default and doesn't pay the holdouts, there might be substantial costs, being basically unable to access markets for some time," said Olivier Blanchard, head of the International Monetary Fund's team of economists.

Mr Blanchard, speaking at a news conference on the latest IMF growth forecasts for the global economy, also emphasized that "there's a cost to the world in the sense that we need resolution systems which work well when countries are in trouble." Under a US court order, Argentina has until next Wednesday to either pay certain hedge funds demanding full payment on defaulted bonds or risk being declared in default.

Mr Blanchard said the Argentina case means "there's much more uncertainty as to how we'll be able to restructure debt for others countries in the future.
...
Source: Business Times Breaking News

A staring contest, and see who blink first?

Argentine debt mediator says time running short for deal

NEW YORK - Less than a week before Argentina could default on its sovereign bonds, the government and holdout creditors have yet to meet face-to-face despite an urgent plea from the U.S. court-appointed mediator on Thursday that they start direct talks.

"The issues separating the parties remain unresolved at this time. The time for the Republic to avoid default (July 30) is short," mediator Daniel Pollack said in a statement following three hours of shuttle diplomacy.

"After speaking with both sides, separately, I proposed and urged direct, face-to-face talks between the parties. The representatives of the bondholders were agreeable to direct talks. The representatives of the Republic declined to engage in direct talks," Pollack said
...
http://www.todayonline.com/business/arge...-appointee

4 days left

What happens then?? Worse than Greece?

via Xperia Z1 with Android 4.4.4 running tapatalk.

Non event..
Just noise and stll status quo.

The rest of world might be status quo, without much impact, but I doubt Argentina will remain status quo, after the default...

Argentina to hold last-gasp debt talks with mediator Tuesday

BUENOS AIRES/NEW YORK - Argentina will on Tuesday meet the U.S. mediator in its battle with 'holdout' debt investors suing the country for last-minute talks to avert a second default this century, but hopes for a deal are fading fast.

Mediator Daniel Pollack said on Monday the Argentine government advised him it was sending a delegation of technical, financial and legal representatives to meet him at 11 a.m. EDT on Tuesday in his office in New York.

However, Argentine government sources said Economy Minister Axel Kicillof, the country's chief dealmaker who has brokered deals with foreign creditors and investors this year, will be in Caracas, attending a meeting of the South American trade bloc Mercosur.

"I again urged direct, face-to-face conversations with the bondholders, but that will not happen tomorrow," Pollack said, referring to the holdout creditors.

Argentine dollar-denominated bonds closed down as much as 3.3 percent in over-the-counter trading on Monday, as investors worried about Wednesday's deadline for Latin America's No. 3 economy to either pay the New York hedge funds in full or cut a deal to stave off a default.

Argentina's isolation from global capital markets means an eventual default would be highly unlikely to send shockwaves through emerging markets worldwide. But it will hurt a domestic economy already in recession and battling soaring inflation.
...
http://www.todayonline.com/business/arge...lks-monday

Argentina has defaulted so many times I am frankly surprised that anyone was willing to lend them money in the first place. Same goes for Greece.

This seems like a replay of the same story. Default. Restructuring. Re-issuing of bonds with *new* terms*. Rinse-repeat.

As they say, hope springs eternal.

Regards,
theasiareport.com

(29-07-2014, 09:46 AM)theasiareport Wrote: Argentina has defaulted so many times I am frankly surprised that anyone was willing to lend them money in the first place. Same goes for Greece.

This seems like a replay of the same story. Default. Restructuring. Re-issuing of bonds with *new* terms*. Rinse-repeat.

As they say, hope springs eternal.

Regards,
theasiareport.com

If I understand it right, the difference in this round, is the lending is disallowed, with the court ruling.

(29-07-2014, 09:46 AM)theasiareport Wrote: Argentina has defaulted so many times I am frankly surprised that anyone was willing to lend them money in the first place. Same goes for Greece.

This seems like a replay of the same story. Default. Restructuring. Re-issuing of bonds with *new* terms*. Rinse-repeat.

As they say, hope springs eternal.

Regards,
theasiareport.com

This is actually the opposite IMO.. It's precisely because these holdout are had been refusing to settle for a write-off/restructure/new debt. Question is, will Argentina call their bluff?