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The Italian bondholders say they are being discriminated against
La Nacion
September 05, 2008

Criticism from Nicola Stock to the Government

By Elisabetta Piqu

VENICE.-Nicola Stock, president of Task Force Argentina (TFA) the group that represents some 190 000 Italian bondholders that still hold USD 4400 million in "tango bonds" which were defaulted on in 2001, yesterday criticized the Government's decision to pay off the Paris Club. A member of the influential Italian Banking Association, Stock said that this measure "represents the ultimate unilateral act" of Argentina against the small Italian investors. "Buenos Aires continues to violate its international obligations to bondholders" added Stock who also mentioned "discrimination" towards bondholders.

In a press release, the TFA said that "after the rigid swap offer made to investors in 2005, there came the upfront payment of 10 billion dollars to the IMF, always through the Central Bank", something that for Stock is proof that Argentina is still "trying to avoid any form of a negotiated solution". The release also noted that in Washington, the appeal presented by this group against Washington is moving forward in the ICSIC court. "Currently the legal recourse is in its jurisdictional phase: on November 7, the legal representatives of the Italian bondholders will deposit a replica of the defensive document written by Argentina" he said.

Beyond the release, in a telephone conversation with La Nacion, Stock said that according to his point of view, "the decision to pay off the Paris Club is not enough for Argentina to return to the international markets, echoing the words of several analysts and also the Financial Times".

"The fact that Argentina has paid off the IMF in cash first and now wants to do the same with the Paris Club shows that the country was never in any state of emergency as some of their laws said; they never wanted to negotiate and there is no comparable treatment between the different types of creditors" he complained.

Asked whether the bondholders he represents are thinking of embargoing Argentine reserves, the TFA president said not. "We can't do this because we are presenting an appeal before the ICSID, but there are US funds that could try it. We believe that should wait for a favorable ruling from the international court, which could perhaps happen over the next year."

Stock said that if they won, "we need to come after Argentina in the 143 countries that signed the ICSID convention. There must be Argentine assets that can be embargoes in some of these," he said. What kind of assets? "State exports, customs taxes, anything".