Argentina reopens access to dollars
By Paul Kilby
NEW YORK, April 24 (IFR) - Argentina won a small victory in its long legal war against holdout bondholders this week when it overrode litigant investors' objections to raise US$1.416bn through a local tap of its Bonar 8.75% 2024s.
For the sovereign, the move marks a rare success story in its latest attempts to gain access to international capital, albeit through a local auction.
The Kirchner government appears to have learnt from past botched sales of the Bonar 2024s, which failed either because of poor pricing or exposure to legal risks.
Market-determined pricing in a local auction that helped ring-fence participants from legal claims in US courts allowed Argentina to score a victory on this occasion.
Holdout investors suing the sovereign - including billionaire Paul Singer's NML Capital and Aurelius Capital - were quick to cry foul, asking US courts to force Argentina and banks involved in the deal (Deutsche Bank and BBVA) to disclose details of the bond sale.
"We are closely scrutinising this highly unusual transaction to determine what enforcement actions are appropriate," Robert Cohen, an attorney for NML Capital, said in statement last week.
But the holdouts' attempts to block the sale, which settled on April 23, have so far had little impact on the trade, potentially opening up market access for the sovereign in the future.
"It will be positive to the extent that Argentina can still issue paper," said Jorge Piedrahita, CEO of broker Torino Capital, who noted that foreign accounts had expressed interest in the auction. "It is clear also that holdouts do not have the capacity to interrupt an issue like this," he said. Continuación...