Buenos Aires province has resolved a legal dispute concerning defaulted debt with two hedge funds following a defeat in a New York court in 2024. The provincial authorities provided the hedge funds with US$106 million in bonds and cash, according to a government source speaking to the Herald. In October 2024, a New York court mandated that the Argentine province disburse US$124.7 million to hedge funds Glacial Capital and TRSE Holdings.
A representative from the provincial government indicated that, when factoring in interest, the overall sum would reach US$169 million. The settlement they ultimately paid amounts to 63% of that figure. The bonds that defaulted were issued in 2011, during the governorship of Daniel Scioli, who was affiliated with the Peronist party at that time. María Eugenia Vidal, representing the conservative PRO party, took over the governorship from Scioli, serving in that capacity from 2015 to 2019. The bonds reached their maturity in July 2020, yet remained unpaid, occurring months after Vidal’s replacement by the current Peronist Governor Axel Kicillof. In August 2021, the province achieved a successful exchange of 97.66% of the total outstanding principal of the bonds governed by foreign law. Nonetheless, Glacial Capital and TRSE Holdings opted out of the transaction. “The debt stock rose significantly between 2016 and 2019, attributed to issuances in the international capital market exceeding USD 5 billion,” stated a communiqué from the Economy Ministry of Buenos Aires province.
The local government stated that the agreement includes terms akin to those embraced by the overwhelming majority of bondholders throughout the restructuring process. The funds acquired an equivalent amount of USD Series A bonds maturing in 2037, as they would have received had they participated in the 2021 exchange, along with a cash sum corresponding to the services accrued and paid on the bonds from 2021 to the current date. An insider from the provincial government indicated that the agreement represents securing funding until 2037 at an unprecedented rate for the province of just 3.25% annually. The province was concurrently dealing with additional lawsuits initiated in Germany regarding the 2021 debt restructuring. Nonetheless, those have been recently retracted, indicating that all legal actions against the province related to the restructuring have now been settled, according to the local government.
Dennis Hranitzky is the attorney for Glacial Capital and TRSE, having previously represented NML Capital, a fund that asserted in 2012 that it was owed US$370 million from Argentina’s 2002 debt default. In October of that year, he notably boarded Argentina’s ARA Libertad frigate, which was moored in Ghana, to seek its embargo following a court ruling in favor of NML. The vessel was held for a duration of 77 days.