This weekend a full page ad decrying the hedge funds that sued Argentina for over $US1.3 billion in sovereign debt appeared in the Wall Street Journal, The New York Times, and The Washington Post.
“Paying the vulture funds is a path leading to default,” it said. “The will of Argentina is clear: we expect a judicial decision that promotes fair and balanced negotiating conditions to resolve this protracted and difficult dispute.”
Here’s a screenshot of the ad below, via Bloomberg’s Katia Porzecanski:
It probably doesn’t make much of a difference since this is a matter of negotiations between lawyers now, but it sounds like Argentine President Cristina Fernadez de Kirchner and her government are taking their case to the Court of public opinion.
It’s one of the few venues they have left after the Supreme Court decided not to hear their case, which dates back to their country’s 2001 crash. For the last 13 years, the group of hedge funds, led by billionaire Paul Singer, has refused to restructure their debt along with the majority of bond holders.
For all that time Argentina has said that these “vulture funds” have no right to touch the country’s money. Now, despite their tough tone, the message from the country less, “don’t touch us” and more “please be gentle.”
“The will of Argentina is clear: we expect a judicial decision that promotes fair and balanced negotiating conditions to resolve this protracted and difficult dispute that has affected, affects and will continue to affect the Argentine people due to the voraciousness of a minute group of speculators.”
The ad also says that paying the “vultures” exposes Argentina to lawsuits from investors that could cost the country up to $US15 billion — more than half of what it has in its Central Bank.
That said, unless the international community is convinced Argentina will pay this debt, it will not be able to tap into bond markets to raise any cash. The country is running out of time.
And according to Bloomberg, a U.S. law firm asked the International Swaps & Derivatives Association if Argentina’s intransigence on this issue has already technically put it into default. Schulte Roth & Zabel LLP, a U.S. law firm, requested the ruling for a “potential repudiation/moratorium event.”