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Argentina May Issue Bond to Pay $16 Billion Award in YPF Lawsuit – Bloomberg

Milei says Burford would be paid with tax named after rival Without dollar reserves, Argentina has to pay bondholders, IMF.  YPF was renationalised by the government of Cristina Fernández de Kirchner in 2012 (Bloomberg)
Milei says Burford would be paid with tax named after rival. Without dollar reserves, Argentina has to pay bondholders, IMF. YPF was renationalised by the government of Cristina Fernández de Kirchner in 2012 (Bloomberg)

Patrick Gillespie, Bloomberg News

EnergieNet.com 12 27 2023

Argentina’s President Javier Milei is considering issuing a perpetual bond to pay a $16 billion lawsuit award to Burford Capital stemming from the nationalization of state-run energy company YPF. 

Swinging between political jabs and policy intentions, Milei suggested that the government would issue the bond without a fixed maturity while charging Argentines the “Kicillof tax,” named after Buenos Aires Governor Axel Kicillof who was the economy minister when the YPF lawsuit started.

“Here we have a problem because we don’t have the money, we don’t have $16 billion, that’s the reality — but we have the willingness to pay,” he said in a TV interview with La Nacion Tuesday night. “What we’re going to do, it’s an idea we’re working on, is to create the Kicillof tax, meaning pay this fund with a perpetual bond.” 

Read More: Oil Driller YPF Surges as Winner Milei Touts Privatization

The Economy Ministry didn’t immediately provide details about Milei’s idea. Burford Capital didn’t respond to a request for comment after business hours. 

Milei issued a decree last week ordering all state-run companies to prepare for privatization, although he hasn’t set a timeline for the sale of the energy company.

After several years of litigation in New York, a judge awarded Burford Capital $16 billion in a lawsuit against Argentina that claimed the country had fumbled key legal aspects of the YPF nationalization in 2012. US Federal Judge Loretta Preska stated that Argentina must pay by Jan. 10 or Burford has the right to request seizures of Argentine assets. 

Read More: Burford Eyes 37,000% Return in $16 Billion Argentina Award

The case adds to Argentina’s long list of financial troubles. With central bank reserves in the red, the country needs to start repaying next month creditors who accepted a $65 billion bond restructuring in 2020. It also has to renegotiate a $44 billion deal with the International Monetary Fund.

Milei said the current IMF deal has collapsed because the previous government missed key targets agreed upon with the Fund, and added that his austerity-driven administration is working to reset the program.

“The Fund sees us as heroes,” he said. “We’re working to comply with the agreement.”

12 26 2023

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