Argentina lost this Wednesday a lawsuit over the payments of the so-called “GDP coupons” of 2013, a series of euro-denominated assets that adjusted for GDP growth. The decision was made by the London High Court and the compensation requested by the four plaintiff vulture funds amount to 643 million euros, about US$704 million.
The vulture funds Palladian Partners, HBK Master Fund, Hirsh Group and Virtual Emerald International Limited sued the country in 2019 for allegedly have altered the statistical data of GDP growth that guaranteed the payment of the bonds created in 2005, according to the Reuters agency.
The vulture funds argued that Argentina had a “propensity” to falsify official figures to avoid paying the bonds.
Argentina’s lawyers said “no rational government deliberately underestimates GDP” and noted that the country had paid out nearly $10 billion to holders of its GDP-linked securities since they were first issued in 2005.
Judge Simon Picken ruled in favor of the four vulture funds and said that Argentina must pay 643 million euros plus interest. But finally ruled that Argentina must pay 1.33 billion euros (about $1.46 billion) in return on all GDP-linked bonds.
between the four vulture funds own 48% of the total GDP coupons issued.
The instruments were issued during the management of the Economy portfolio of Roberto Lavagna with Guillermo Nielsen as finance secretary 2005.
The GDP coupons guarantee payments to bondholders when the Annual economic growth exceeds 3%.
The title was created in several currencies and served as an attraction for the bondholders to accept the exchange that was offered that same year.
However, as of 2012 no disbursements were recorded, parallel to the questioning of the fidelity of official statistics. The official statistics site, the indecwas intervened in 2007 and since then the veracity of the data and, consequently, the profitability of the PBI coupons have been questioned.
In parallel, in 2014 The methodology for calculating the growth of economic activity was modified and began to be taken as a base in 2004.
In 2018, during the presidency of Mauricio MacrisThe annual growth figures during the previous presidencies were reviewed and they determined that in 2013 the GDP had grown 2.4%, below the 3% necessary to pay the bonds.
This is the second ruling in a week in which international courts have ruled against Argentina. The previous one was for the expropriation of YPF and ordered that the State has to indemnify the other shareholders of the company when it was nationalized, although an amount has not yet been determined.
Source: Ambito
