by Elliott Morss, Morss Global Finance
Minister Kicillof:
You got caught is a squeeze by your “equal treatment” (RUFO) clause and an overreaching US judge. So you have now not paid any of your debtors on an agreed-upon so you are legally in default. And sadly, this was done at a time it appears your country wants to “rejoin” the global financial community.
On a more positive note, there is some sympathy for you:
- Some blame what happened on the so-called vultures;
- Some understand that you were blocked by your RUFO clause, and
- Some blame this on an overreaching American judge.
In this circumstance, I recommend that you do the following:
- Inform all creditors that you will offer new terms that approximate the 2010 settlement later this year;
- Indicate that the new terms will not include a RUFO clause but instead a clause saying that all creditors will be required to accept the new terms once 60% of creditors have accepted them;
- Indicate that to avoid the US judge’s rulings, you cannot do anything until the RUFO clause in the defaulted debt agreements expires at the end of 2014;
- Reaffirm your intention to continue to pay the Paris Club creditors on the agreed-upon terms.
Taking these steps should mitigate disruptions and further your re-entry into the global financial community.
