Los fondos Palladian Partners L.P., HBK Master Fund L.P., Hirsh Group LLC y Virtual Emerald International Limited demandaron a la Argentina en 2019
By iProfessional
05/04/2023 – 08,33hs
Argentina lost a lawsuit on Wednesday in the London High Court about payments that four hedge funds said were due for euro-denominated securities linked to Argentina’s gross domestic product (GDP) in 2013.
Funds Palladian Partners L.P., HBK Master Fund L.P., Hirsh Group LLC y Virtual Emerald International Limited they sued Argentina in 2019, requesting compensation of up to 643 million euros (704 million dollars).
He Judge Simon Picken ruled in favor of all four funds on Wednesday, saying in a written ruling that Argentina must pay 643 million euros plus interest.
The judge also ruled that Argentina had to pay about 1,330 million euros relative to all GDP-linked stocks, of which the four funds hold approximately 48%.
Demand Details
He coupon tied to GDP it was used as a bait to attract as many bondholders as possible to the debt swap that took place in 2005. This financial instrument is paid to bondholders when Argentina grew more than 3% in the year. The claim against the country was based on the change in the basis of the calculation of the level of the economy (GDP).
The legal firm Quinn Emanuel Urquhart & Sullivan, which represents the plaintiffs, knows Argentina closely, since it defended other funds in the debt restructuring carried out by the former Minister of Economy Martin Guzman, in 2020.
Argentina loses the lawsuit in London of 4 investment funds
In addition to the trial in London, there is another identical lawsuit in New York filed by the Aurelius fundBut the trial hasn’t started yet. At the end of the year, it should begin in the Southern District Court of New York, whose judge is Loretta Preska, the same one who ruled against the Argentine State last week for the expropriation of 51% of YPF’s shares. “There’s another US$415 million plus interest,” said Sebastián Maril, director of Research for Traders, who closely follows lawsuits against Argentina abroad.
Another decision by Axel Kicillof
In 2005, the then Minister of Economy, Roberto Lavagnaand his Secretary of Finance, Guillermo Nielsen (today the Argentine ambassador in Saudi Arabia), presented an offer to exchange the defaulted titles of 2001 and proposed as a “sweetener” -as they say in financial jargon- a coupon tied to the evolution of the GDP, which paid if the country grew above 3% of the product (it demanded a higher level of growth in the first years and then dropped to 3%).
In 2014, Axel Kicillof, The current governor of Buenos Aires and Minister of Economy at the time, announced a change in the GDP calculation base, which in practice reduced the country’s growth numbers for 2013. With this change, the country did not grow by above 3.26% as established in the coupon for that year.
When the coupons were launched, in 2005, INDEC took 1993 as the base year of calculation to report the growth of the economy. But the base year changed to 2004 in 2013, in an attempt by the government of Cristina Kirchner to correct a statistical series that was not very credible, after INDEC intervened in 2007 at the hands of Guillermo Moreno. Since then, moreover, INDEC has stopped publishing the original series based on 1993.
Kicillof was also the one who advanced with the expropriation of 51% of the shares of YPF, in 2012, and made the decision not to make an offer for the entire company, as stated in the statute of the oil company, designed in 1993, when it began trading on the New York Stock Exchange. Due to that decision, the Burford and Eton Park funds sued the Argentine State, and Judge Preska ruled against Argentina last Friday, which must pay compensation of between US$3.5 billion and US$19 billion.
