President Macri to attend Nuclear Industry Summit following President Obama’s visit to Argentina
France-Argentina sign nuclear deals
Obama to Argentina followed by Macri to Washington. No sooner will President Obama be wrapping up his planned state visit to Argentina on March 23 and 24, than Argentina’s President Macri will visit the US to attend the 4th Annual Nuclear Industry Summit to be held on March 29-31 in Washington, DC. Sponsored by the Nuclear Energy Institute, the Nuclear Industry Summit is a high-level event that brings together nuclear industry leaders, government officials and regulators involved in nuclear energy generation around the world.
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President Obama’s visit to Argentina is expected to focus on investment and trade in the areas of energy, including renewables, agriculture, tourism and research and development. It is unlikely that President Obama would have accepted President Macri’s invitation unless he had been assured that reasonable progress was being made with negotiations between US hedge funds and Argentina on the repayment terms of defaulted bonds.
To understand the progress that’s been made in the last few weeks, we go back to 2001 when Argentina defaulted on bonds that had been issued by a prior military government. Some bondholders accepted a write-down of a portion of what was owed to them in debt restructurings in 2005 and 2010. Other bondholders, and hedge funds that subsequently bought the original bonds, rejected the debt restructuring and held out for full payment. They became known as the “holdout bondholders.” Since the original bonds were issued under US law, the “holdouts” brought their claim before a US court and Judge Griesa upheld their claim for payment of the original bonds in full. Judge Griesa went further: he issued a stay by which Argentina was forbidden to pay the interest owing to the bondholders that had accepted the 2005 and 2010 debt restructuring until the “holdouts” were paid in full. Since Argentina was forbidden under US law to pay the interest due to other bondholders, it was declared to be in default in mid-2014 despite the amount owed in interest having been deposited by Argentina in a US bank for distribution to the bondholders.
Judge Griesa has now lifted the stay on condition that Argentina meets certain commitments, one of which is that Argentina pays that interest owing to the bondholders of the 2005 and 2010 settlements. Another condition is that Argentina must repeal two laws that it passed in 2005, that forbid the payout of the holdouts. Judge Griesa commented: “President Macri’s election changed everything. The Republic [of Argentina] has shown good-faith willingness to negotiate.” The lifting of the stay allows Argentina to access international financial markets. And French President Hollande said yesterday, “We support the efforts of Argentina to find a solution to the central question of the debt, as we have always done in the past. It is normal that Argentina, a member of the G20, can benefit from financing on reasonable terms.”
Two of the 6 holdout bondholders are reported to have accepted Argentina’s settlement offer on the original bonds and a decision is awaited from the other 4. The Economist commented, “The latest ruling deprives the remaining holdouts of crucial leverage over the Argentine government and improves the chances of a swift resolution to the debt saga.”
French President Hollande’s visit to Argentina. President Hollande arrived in Argentina on February 24 and immediately signed more than 20 commercial cooperation agreements. One of the agreements was between French nuclear company Areva and Argentine nuclear company INVAP to jointly bid on the building of a nuclear research reactor and a commercial electricity-generating power plant in energy-strapped South Africa.
Sources: La Nacion, El Ambito, Latin Correspondent, The Economist.
- Nuclear Industry Summit 2016
- February 24, 2016 – Mauricio Macri recibe al presidente François Hollande en Casa Rosada
- February 24, 2016 – Griesa lifts ban on Argentina ‘vulture’ settlements
- February 23, 2016 – El “efecto Obama” llegan dos misiones comerciales
- February 21, 2016 – Argentina wins a victory against its hedge fund creditors
- February 19, 2016 – French President to visit Peru, Argentina and Uruguay
- February 19, 2016 – Obama’s visit is evidence Argentina is reinserting in the world, underlines Malcorra
Richard Spencer is president and CEO of U3O8 Corp., (UWE.TO, OTC:UWEFF and SSE:UWE). U3O8 Corp. (www.u3o8corp.com) is a Toronto-based exploration company with a portfolio of ... <Read more about Dr Richard Spencer>