The judge Loretta Preska ruled in favor of Argentina in the 2019 GDP Coupon case and thus Argentina avoids paying 1.3 billion euros. The news was confirmed by Sebastian Marilthe CEO of Latam Advisor through the social network
The Argentine State had been condemned in English courts for changes in INDEC statistics during the presidency of Cristina Kirchner. The change caused harm to the bondholders since they generated lower profitability for coupons tied to GDP, issued along with the bonds in the 2005 debt restructuring and tied to the growth of the local economy.
The Argentine Republic appealed the decision, but to do so it has to comply with a series of requirements, among them the creation of the trust to deposit the 337 million dollars there as collateral, a movement that was made by the Government of Javier Milei last week.
The funds, which owned around 48% of the securities linked to Argentina’s GDP in 2013, maintained that they were entitled to a series of payments that were not made due because, during Cristina Kirchner’s second presidency, Guillermo Moreno – at the head of INDEC – modified the national GDP data to avoid disbursements.
A little less than a year ago, they won the trial and it was ruled that Argentina had to pay 1.33 billion euros (US$ 1.44 billion) plus interest in relation to all securities linked to GDP.
However, as published by the Reuters agency, Argentina had permission to challenge that sentence: this was reported by the lawyers representing the Nation in judicial documents presented in a preliminary hearing in the TLondon Court of Appeal.
As a condition, Argentina was asked to pay some 310 million euros that would be kept in custody until its appeal is resolved. The country asked the Court of Appeal to reconsider that condition, arguing that it would cause “harm to the people of Argentina”, according to his lawyer Tamara Oppenheimer. Finally, Argentina’s request was accepted in its favor.
As explained Sebastian Maril, Preska “did not make any reference to Argentina’s decision to change the growth formula.” “The judge simply said that the plaintiffs entered through the wrong door and had no right to file the lawsuit for not complying with certain requirements stipulated by the “no action clause,” she reported.
The judge denied the claim of the plaintiffs, who did obtain a favorable ruling in the British courts.
PBI coupons: what they are and how the debt originated
PBI coupons were issued in 2005 as part of the restructuring of the debt defaulted in 2002 and they had to pay returns to the bondholders every time Argentina reached a growth of its Gross Product of 3.3% annually.
After their release on the market, PBI coupons quickly became one of the favorite assets of the local market in the face of the growth at “Chinese rates” that took place during the presidency of Néstor Kirchner and the first mandate of Cristina Kirchner.
In it last quarter of 2013the GDP calculation formula and the annual growth at that time closed at 3.2%, 0.1% below the 3.3% that required payment. So, there were no new disbursements for that concept.
Those unspecified payments were what generated the lawsuit resolved last year in London that added US$ 1,440 million to the external debt national.
Source: Ambito
