Tucked away deep inside today’s newspaper was a small report that Argentina may be on the verge of ending its long fight with a group of hedge funds and rejoining the international brotherhood of debtor nations. It’s much bigger news than the coverage suggests. Chalk it up to Argentina’s new leadership – and its new communication strategy.
Like the great Lionel Messi, the government of Argentina made a dramatic, slashing run toward the goal that left its opponents’ heads spinning.
Negotiators for newly elected President Maruicio Macri made a cash offer to creditors earlier this month, signaling a desire to end the impasse that has isolated the country since its 2001 default. The new offer produced a preliminary settlement agreement with two key funds, and smaller settlements with other creditors followed.
And in the most dramatic sign of progress, U.S. District Judge Thomas Griesa yesterday lifted an injunction that had prevented Argentina from issuing new bonds and making payments on its existing international debt.
Argentina’s communication strategy was notable for its simplicity. In contrast to the stage-managed news conferences, full-page advertisements and verbal assaults Argentina was known for under Macri’s predecessor, Cristina Fernandez de Kirchner, this time the government issued a simple, constructive statement.
The judge’s order opens the way for Argentina to return to the international capital markets. It also puts intense pressure on the remaining holdout creditors, particularly Paul Singer’s Elliott Management and Aurelius Capital Management, to come to a settlement – something Argentina’s previous bluster failed to do.
Notably, Elliott and Aurelius had no statement for the press. Like Messi’s opponents, they have been caught flat-footed.