November 1, 2014
Gov’t ups pressure on BoNY, Citibank to pay
The government will formally demand today that intermediary banks charged with delivering the country’s debt payments make hundreds of millions of dollars in payouts that were due in June but that have been blocked by United States Judge Thomas Griesa.
The government deposited payments owed to holders of its restructured bonds with intermediaries Citibank Argentina and Bank of New York Mellon. Griesa said the deposits were illegal because he had ordered Argentina not to pay restructured bondholders without paying the holdouts at the same time.
The news came on the same day as financial markets, particularly in New York, took the first big plunge yesterday since US credit rating agencies declared Argentina to be in default last week.
Shares of Argentine companies that trade on Wall Street dropped up to 9.8 percent yesterday, while the Merval benchmark stock index decreased 3.1 percent, as days pass with nothing but rumours about a possible negotiation between holdouts and private entities, including international banks and companies.
Meanwhile, both the official and illegal dollar were flat yesterday, closing at 8.28 pesos and 12.70 pesos, respectively.
Banks and energy companies registered the largest drops in Wall Street yesterday, led by a 9.7 percent decrease in Banco Macro. At the same time, Banco Francés dropped 9.5 percent, Banco Galicia 8.3 percent, Edenor 6.6 percent, Telecom 5.3 percent, Pampa Energía 4.6 percent, Nortel Inversora 4.5 percent and Petrobras 4.3 percent.
“Traders are starting to speculate over a failed agreement between holdouts and international banks. There was no news over the last few days about that,” Santiago Llul, vice-president of Futuro Bursatil brokerage, told the Herald. “The market will remain very volatile until there are certainties about that. If people see the drops continue, they will start selling their bonds to avoid losing more money.”
Following Wall Street’s negative figures, the Merval benchmark stock index decreased 3.1 percent and closed at 8,063 points with 178 million pesos traded. A total of 50 companies saw declines, with only 16 seeing gains. Banks, including Grupo Financiero Galicia (6.7 percent), Banco Francés (6.5 percent) and Banco Macro (6.1 percent) saw the largest drops.
CNV seeks information
CNV securities regulator chief Alejandro Vanoli issued yesterday an information request to the United States Securities and Exchange Commission (SEC) to analyze presumed speculative manoeuvres of hedge funds, claiming some may have been eager to avoid reaching a deal with the government in order to collect the credit default swaps.
Herald with DyN, Reuters,Télam