The legal representatives of Argentina and those of the Attestor Master Value fund met at the Second Circuit Court of Appeals in New York to discuss possible seizures of Argentine assets in a public hearing. Although these assets were declared confidential and, therefore, no direct reference was made, the conversation gave clues about what Argentina's seizable assets are.
Sebastián Maril, an analyst at Latam Advisors who closely follows international litigation against the country, indicated in his X account that these are US Treasury bonds that Argentina used as collateral for the “Brady Bonds” that matured on March 31, 2023.
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“Until that date, they were deposited in the New York branch of the United States Federal Reserve and had a value of about US$80 million. After maturity, when they were no longer needed as collateral, Argentina apparently brought those bonds to the Central Bank, although it is not confirmed,” Maril explained to TN.
Judge Loretta Preska hears several of the trials against Argentina that are being carried out in the United States. (Photo: The New York Times).
The trial judge, Loretta Preska, had already ruled in favor of Attestor Master Value for US$477 million and had authorized the fund to seize these bonds. The claim is for the default of the debt after the 2001 crisis and Argentina is appealing the adverse ruling. In any case, Maril indicated that there are five other funds that could also seek to seize the same securities.
What were the “Brady Plan” bonuses?
At the end of the '80s, Latin American countries experienced a debt crisis due to loans they had with American commercial banks. At that time, governments used this route as their main form of financing instead of the sovereign debt market.
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US Treasury Secretary Nicholas Brady designed a plan for Latin American countries to exchange their bank loans for bonds backed by the US Treasury. “In what was then a novel strategy, banks agreed to much-needed debt relief—the average reduction was 35%—in exchange for risk-free tradable instruments,” the IMF blog explains.
Argentina entered the Brady Plan in 1993, during the presidency of Carlos Menem. (Photo: DYN agency archive/Ezequiel Pontoriero).
Argentina entered the “Brady Plan” in 1993 and restructured its debt by issuing bonds that had Treasury securities that are now subject to embargoes as collateral. To enter the plan, in addition, the countries made a series of concessions and committed to applying certain fiscal and adjustment policies with the aim of transmitting confidence to investors.
The legal agenda that awaits Javier Milei
In addition to the hearing last Friday, the Argentine legal representatives have other appointments in the coming days. On February 9, Argentina must appear before Judge Jia M. Cobb in Washington DC to establish the bases of embargoes that the country will suffer if it does not pay the sentence for the expropriation of Aerolíneas Argentinas. The magistrate also cited Titan Consortium, the fund that is suing the country and that already had a favorable ruling for US$340 million.
The beneficiaries of the ruling for the expropriation of YPF also began the embargo process on Argentine assets. (Photo: LUIS ROBAYO/AFP).
On March 12, the country faces another hearing in the Washington Court of Appeals for the seizure of a property belonging to the Argentine State located in that city. It is because of the trial that the Bainbridge fund won from the country for US$96 million. Due to that same ruling, the Bainbridge fund also has a list of Argentine assets that can be seized pending submission to the Southern District Court of New York.
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There are also possible embargoes pending in the litigation over the expropriation of YPF. Judge Loretta Preska forced Argentina to pay US$16.1 billion to the Burford Capital and Eton Park funds for the differential treatment that minority shareholders had in the way the company was nationalized in 2012.
The government of Javier Milei had asked the judge to extend the start date of the possible seizures, but the judge refused and the procedure began on January 11. However, the difficulty for plaintiffs lies in finding attachable assets of Argentina abroad.