Paul Singer appears to have changed his tune on Argentina.
After a decade of aggressively pursuing $1.44 billion he claims the country owes him and a group of bondholders, including successfully pressing Ghana to seize a locally docked Argentine naval vessel to help pay down the debt, the billionaire New York hedge fund mogul is sounding like Bobby McFerrin in “Don’t Worry, Be Happy.”
Singer’s Elliott Management now feels Argentina will do the right thing, according to recent court filings.
It’s quite a change from last fall’s legal arguments, in which Singer urged a federal judge to hurry up and force Buenos Aires to put some of the monies owed into escrow, citing the country’s president’s plot to avoid the debt payment.
Such a move would have put Argentina into default.
Now there’s nothing but love and trust. Well, at least trust.
“It is hard to believe that Argentina will needlessly trigger yet another default and cause the acceleration of tens of billions of dollars in principal repayment obligations” to a second, rival group of bondholders, Elliott’s lawyer, Ted Olson, told a federal appeals court, according to a filing late Friday.
Elliott and Argentina have been sparring in court for almost a decade over defaulted debt Elliott purchased at a steep discount. The $21 billion hedge fund demands to be paid in full, with interest. About 92 percent of the bondholders entered an exchange offer and accepted a 70 percent haircut.
A dozen of these rival, so-called exchange bondholders, including such names as BlackRock, Alliance Bernstein, Gramercy and Perry Capital, have asked the appeals court to throw out a lower court ruling that would force Argentina to pay the Elliott group each time it makes a payment to them.
The rivals have argued they won’t get their money if that happens because Argentina President Cristina Kirchner has vowed the country will never pay so-called “holdout creditors” who refused to go along with two separate debt restructurings in recent years.
Kirchner’s comments led to speculation the country was devising a way to pay the other bondholders outside of the US, which would create a technical default. Elliott repeated those speculations in several briefs recently.
Singer’s change of tune comes after an appeals court temporarily overturned part of the lower court ruling ordering the escrow payment.
An appeals court hearing is scheduled for Feb. 27.