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    Argentina Tag

    Argentinian president Cristina Fernandez de Kirchner has been formally charged with trying to cover up the involvement of the Iranians in a bombing of a Jewish center. This comes after shocking reports that prosecutor Alberto Nisman had (before his suspicious death) drafted a warrant for the arrest of Fernandez, charging her of attempting to shield Iranian officials from responsibility for the bombing. Nisman was found dead in his home a day before he was slated to testify against the current Argentinian government. BBC News explains how the scandal has ballooned for the Argentinian president:
    Although this was an expected move, it could not have come at a worse time for the Argentine president. Cristina Fernandez de Kirchner was already facing criticism for the way she has been managing the Nisman case, which has become the worst crisis of her political career so far. Now she will also face pressure from the judiciary, which is demanding an unprecedented investigation into a sitting president - one that could end up with an impeachment-like process if she is found guilty. Meanwhile, prosecutors are calling for a massive protest on the streets of Buenos Aires next week in what is expected to become the largest anti-government march in recent years. Opposition leaders, unions and even the Catholic Church are joining calls for a fair and independent investigation into a death that has shocked this nation.

    David previously covered the mysterious death of Alberto Nisman the day before he was to testify before the Argentine Congress regarding an alleged government cover-up of Iran's involvement in the bombing of a Jewish Center in Buenos Aires. There has been speculation that it was not a suicide, that Nisman was murdered by agents of the Argentine government. Now comes a bombshell from the NY Times, Draft of Arrest Warrant for Argentine President Found at Dead Prosecutor’s Home:
    Alberto Nisman, the prosecutor whose mysterious death has gripped Argentina, had drafted a warrant for the arrest of President Cristina Fernández de Kirchner, accusing her of trying to shield Iranian officials from responsibility in the 1994 bombing of a Jewish center here, the lead investigator into his death said on Tuesday.

    Alberto Nisman, the Argentinian prosecutor who investigated the 1994 bombing of the AMIA Jewish center in Buenos Aires and documented Iran's extensive terror ties in the western hemisphere, was found dead at his home Sunday night of a bullet wound to the head. Nisman was slated to testify today on his latest explosive accusations that the current government of Argentina, specifically President Cristina Fernández de Kirchner, purposely covered up Iran's involvement in the bombing in order to preserve a grain-for-oil deal with the Islamic Republic. The New York Times reports:
    The body of the prosecutor, Alberto Nisman, 51, who had been heavily protected by police sentries because of threats, was discovered Sunday night. He had been scheduled to testify on Monday at a congressional inquiry about his accusations. The security minister, Sergio Berni, said evidence at the scene, including a .22-caliber pistol and spent cartridge found near Mr. Nisman’s body, indicated suicide. An autopsy announced later said he had died of a bullet wound to the head. But the news immediately provoked shock and outrage from the political opposition and leaders of Argentina’s Jewish population, Latin America’s largest, who demanded a transparent inquiry into his death. The timing appeared to put a skulduggerous international shadow over his accusations.

    For the second time in 13 years, Argentina has defaulted on its government debt payments after failing to reach a settlement with the so-called “holdout” bondholders Wednesday night. Midnight Wednesday was the deadline of a thirty-day negotiation period during which Argentina was already in technical default, having been barred by a US Court from making its scheduled coupon payments in late June to restructured debt holders. I covered the events leading up to the technical default in this article. Here’s a summary:
    • In late 2001 Argentina defaulted on $144 billion of its government debt. It was in the midst of the 1998-2002 Argentine depression, which was itself a result of poor government policy.
    • In 2005 and again in 2010, Argentina restructured its debts and offered bondholders swaps for new bonds at 30% of their original value in order to guarantee payment. Only 7% of investors opted out of the deal.
    • These opt-outs are today’s holdouts and the ones taking Argentina to court are the “vulture funds.” Led by Elliot Management and Aurelius Capital Management, they want full payment based on the original terms. They are demanding $1.5 billion.
    • During June of this year, US District Judge Thomas Griesa ruled that Argentina must pay all of its bondholders at the same time. Argentina claimed that it could not manage to do this. The country was dealt a huge blow when the US Supreme Court refused to take the case, thereby affirming Griesa’s ruling.
    • When Griesa ordered payments to the restructured debt holders be returned to the Argentina the country entered technical default with a thirty-day period to negotiate a settlement.
    • The issue is being hashed out in New York state courts because the capital markets associated with the bond transactions are located on Wall Street which is under New York’s jurisdiction. Former Argentine President Nestor Kirchner also transferred legal jurisdiction of the matter over to New York courts during the initial debt restructuring negotiations.
    For missing the $539 million payments to the restructured debt holders once again, Argentina is now in a state of default. This was despite a last-ditch effort by private Argentine bankers to prevent default by offering to compensate the holdout hedge funds or to purchase their bonds at full value.

    During the past two weeks Argentina’s soccer team has rolled over its competition to advance to the World Cup Quarterfinals. Meanwhile, the team’s country has, yet again, collapsed into default. For 12 years, Argentina has been engaged in a financial and legal row with private creditors in the US over payments on its government bonds—either long overdue or unwarranted, depending on which side you ask. The country failed to make court-ordered payments yesterday to holders of its restructured and original—or “holdout”—debt. It is now in technical default, having missed the payment, and has a 30-day grace period to negotiate with creditors before entering true default. Argentina’s path to financial insolvency began in the last week of 2001 when Argentina announced it was defaulting on $132 billion of its debt, which was then one-seventh of all the money borrowed by the Third World. The announcement came in the midst of the 1998-2002 Argentine depression, itself a result of poor government policy and external economic crises. Despite the default, some US investors scooped up these seemingly worthless bonds at enormous discounts in hopes of some future payment. In 2005 and in 2010 Argentina restructured its debts and offered these bondholders swaps to replace their original bonds for new ones at downgraded terms, and 93% of investors did take up the offer. The country also passed a law forbidding payment on the original bonds. However, a small contingent of investors opted out and insisted on payment on the original bonds. The Argentine government and many elements in the international press have since called these investors “vultures.
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