Just a few hours to Argentina, to show the court in the United States in a $1 billion debt showdown at the end of the show before, President cristina fernandez seemed to keep her: "we want to more" motto. It is reported that her government is preparing to respond, analysts say, may cause countries to a catastrophic default.
Argentina, until midnight on Friday suggested how to satisfy won a $1.4 billion verdict after ten years the plaintiff insists on fully paid in cash, plus interest and penalties, to sovereign debt, the country has not pay, because it's the world record by default, in 2002.
Government officials have not publicly said at this week's plan, but they have said repeatedly that the plaintiff believes should be 92% in Argentina "vulture funds" of other investors, in order to win in 2005 and 2010, to accept their default bonds: a pack of new bonds worth less than 30 cents.
Details may not know, until the deadline, but the broader aspect were widely reported, in the Argentine media, rather than a court ordered fast cash, will provide a new bond, this will is not entirely due to the last 35 years. , instead of the full payment, the government will stick to pay no more than 30%.
If so, it will be open to ignore the federal court, Wall Street analysts said.
Argentina can remain attractive, but the U.S. Supreme Court denied such a case, has a long record. This may be a "suicide" the South American country's economy, the financial analyst Josh rose, said graham fisher & Co. Managing director in New York.
"The court has been looking for something simple, such as: we will not pay a sum of money to them, but we will make a quarterly payment $$140 million in three years, they are not looking for creative financing, Argentina or enforcement of the new bond, Ross said." "If someone took the new bond, the Argentine government defaulted on the next day?"
Analysts expressed similar concerns in Argentina, not afraid of the "vulture fund" is very popular in politics, but in the economy is at risk.
If the government loses, "Argentina will have to decide whether to follow the decision or into a technical default, this will increase the risk of the country and deterioration, a publicly traded stock prices, and drive parallel dollars, or even higher, this is the most auspicious time to run the risks," economists la miro Castineira ended, through the analysis of how the government's position.
Appeals court has ruled in October in NML capital co., LTD., the hedge fund billionaire Paul singer in favor of, the terms of the rights and interests "parri" and default debt contracts, Latin America, on the basis of equality to treat all bondholders decide to.
Good, economy minister, el south Lorenzino repeatedly said: here, is equal to the mean that Argentina will pay the plaintiff has no better exchange of bondholders in 2005 or 2010.
The bondholders have repay steadily over the years, to recover the original investment. But Argentina obviously is to insist, the plaintiff than other bondholders years ago began, nothing more, rather than they have the date of payment, Castineira said.
"This brings us to Monday morning, we are in a crisis, because the Argentine government has failed to fulfill its obligations, we returned to the starting point. Unless they sit down and bilateral talks, they are likely to default, Ross said."
"I think it will be important implementation provides a new bond is completely out of court, request or accept in Argentina, Ross said." "They must know they can't win."
President fernandez and her economic team proud sharply reduce the country's debt burden, never pay her government to default on its debt in exchange for new debt. But it still owe tens of billions of many other creditors until solve the debt, its economic punitive high borrowing costs will be strangled, Ross said.
Because of its reputation, or Argentina to look inward, basically draw lessons from their own people, contributing to inflation, and attempts to centralized management is more and more isolated economies often change rules of the exchange of currency, import and export of goods, price and pay taxes.
More and more human trapped by government regulation in Argentina, and foreign companies have been away.
Argentina's largest single foreign investment, worth $6 billion Rio Colorado mines, Brazilian potash, rail and port projects suspended earlier this month, the world's second-largest mining company vale. Executives accused of Argentina's unpredictable high inflation and monetary control to more than 4000 job cuts, while investing more than $100 million, 40% construction completed.
"Control in place, because these unnecessary ideological struggle. As an analyst, my attitude is, I don't really care whether Argentina is the correct business ethics, or intelligence. It doesn't matter, at this point, they need to take care of their population, Ross said." As prescribed by the "how do you people? You bring that foreign direct investment and to stay in nation building."
 



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