South America

In the aftermath of the country’s default, Argentine president Cristina Fernández’s approval ratings jumped as she defiantly stood up to Argentina’s “holdout” creditors, who rejected debt restructurings accepted by 93 per cent of bondholders after the country’s previous default in 2001 and then won a US court order to be paid in full, the Financial Times reported.

Domingo Cavallo, the architect of Argentina’s first debt restructuring deal in 2001, has a solution for the country’s worsening debt drama: pay the holdouts, the International New York Times DealBook blog reported. “Argentina should comply with Judge Griesa’s decision,” Mr. Cavallo said on Wednesday at a conference to commemorate the 70th anniversary of the Bretton Woods system of global financial cooperation. Mr. Cavallo, who is also credited for slaying hyperinflation in Argentina in the early 1990s, was referring to the recent court decision by Judge Thomas P.

Bond market heavyweights, backed by Washington, have come up with a plan they say should avoid a repeat of the sovereign debt meltdown between Argentina and its holdout creditors, the Financial Times reported. The International Capital Market Association, a group representing banks, lawyers, brokers and issuers from 53 countries, has published new terms for government bonds that Leland Goss, managing director, says should reduce the risk of future sovereign debt restructurings being disrupted by a few holdout creditors.

Workers in Brazil’s automotive industry have become accustomed to seeing their sector break new records, with Latin America’s biggest country becoming the fourth largest car producer in the world over the past decade, the Financial Times reported. But last week, 930 employees at General Motors’ plant in São José dos Campos near São Paulo were forced to accept a five-month “lay-off” or suspension to avoid outright dismissals.

A group representing more than 400 of the world’s largest banks, investors and debt issuers has agreed a plan for dealing with financially stricken countries and their creditors, in a bid to prevent a repeat of the wrangling that has pushed Argentina into default, the Financial Times reported. After months of talks convened by the US Treasury in the wake of Greece’s restructuring, global debt experts will on Friday unveil a new framework that could transform the relationship between critically indebted nations and lenders.

President Cristina Fernandez de Kirchner’s government faces a second national strike in less than five months, as a default last month threatens to aggravate quickening inflation and a plunging peso, Bloomberg News reported. Some state employees picketed at the main entrances to Buenos Aires from midday today and marched down 9 de Julio avenue in the city center. Truckers, train drivers, port workers and waiters are set to join them from midnight in a 24-hour strike in demand of higher wages and in protest at dismissals.

Argentina retaliated against Bank of New York Mellon on Monday for refusing to make payments to bondholders in compliance with a US court ruling – a move which has also led a group of hedge funds that includes George Soros’ Quantum Partners to sue the US bank, the Financial Times reported. The move by Buenos Aires, which cancels the banking licences of two local bank officials, follows a proposal sent to congress last week by President Cristina Fernández that aims to replace BNY Mellon as its trustee with a local state-run bank.

Argentina's default three weeks ago, and the ongoing legal battle that led up to it, raises practical, theoretical, and moral questions about the ad hoc process that ensues when a country doesn't repay its creditors, Foreign Policy reported. "We're at a moment where a lot of people have been stopped short and are asking: Is this really the way we want restructurings to go forward?" asked Mark Weidemaier, a sovereign-bond expert at the University of North Carolina at Chapel Hill.

When President Cristina Fernández confidently praised Argentina’s financial system as “one of the most solid in the world” during a speech at the Buenos Aires stock exchange on Wednesday, some of the high-ranking executives present struggled to hide their incredulity, the Financial Times reported. Just the day before, at one point on the verge of tears, Argentina’s mercurial leader had nervously announced a plan to dodge a US court order to pay so-called “holdout” creditors in New York, after the ruling pushed the country into default last month for the second time in 13 years.

A federal court judge said on Thursday that Argentina’s attempt to skirt one of his rulings was “lawless” but stopped short of finding the country in contempt of court, the International New York Times reported. Exasperated lawyers for a group of New York hedge funds that are seeking more than $1.5 billion in bond payments that Argentina has refused to pay pleaded with the judge to take a harsher stance. In a heated moment, one of the lawyers, Robert A.