Argentina and creditors engaged in a 13-year legal battle are ramping up efforts to sway public opinion with television, newspaper and online advertisements.
American Task Force Argentina, a lobbying group partly funded by hedge funds struggling to collect the $1.5 billion they’re owed from the country’s 2001 default, spent about $1 million in the past week in advertising, according to the group’s co-chair, Robert Shapiro. The spots arguing Argentine pensioners and retail bondholders are being cheated out of what they’re owed have appeared in the U.S. on channels including CNBC, CNN, and Bloomberg Television, as well as websites for Politico, the New York Times and Bloomberg.
“Argentina, these people deserve better,” a voice intones at the end of a 60-second spot that highlights the case of a woman who lost her life savings after buying the notes to help fund the care of her 97-year-old father. “It’s not too late to settle with your bondholders and pay your debts.”
The television campaign, which began last week, seeks to rebut Argentina’s description of the holdout creditors as “vultures” that prey on countries in distress. Argentina has taken out full-page ads in newspapers around the world to decry a U.S. judge’s decision to block payments on the nation’s overseas bonds until the country pays the hedge funds in full or reaches a settlement. On Aug. 8, U.S. District Judge Thomas Griesa said Argentina may be held in contempt if officials don’t stop issuing false and misleading statements in the ads.
“We’re only responding to the vulture funds’ defamation campaign against the Argentine government,” said Severino Czapski, who oversees the government’s account at the Buenos Aires office of ad agency Chasqui International. “They use theatrics and drama that don’t correspond to the seriousness of the issue. Our objective is to use facts.”
Argentina’s bonds sank to a two-month low after President Cristina Fernandez de Kirchner said late yesterday she’s sending a bill to Congress to allow the nation to pay the foreign bondholders in local dollar-denominated accounts as a way to skirt the ruling. Holdout creditors who have sued will also have funds deposited locally under original restructuring terms as a show of good faith, she said.
The country’s benchmark restructured bonds due in 2033 fell 2.61 cents to 80.13 cents on the dollar as of 11:05 a.m. in New York, the lowest price since June 19.
American Task Force Argentina is funded by members including Paul Singer’s Elliott Management Corp., which joined with other creditors that rejected debt restructurings in 2005 and 2010 to successfully sue for full repayment. Other members include the U.S. Cattleman’s Association, the National Black Chamber of Commerce and the Montana Women Involved in Farm Economics.
The online ads from ATFA, as the group is known, will run indefinitely, while the print and television ad campaign will end tomorrow. The group declined to say how much in total it had spent on advertising.
Argentina’s government and the holdout creditors are seeking to bolster their perceptions within the country and abroad, according to Diego Ferro, the co-chief investment officer at New York-based Greylock Capital Management LLC, which owns Argentina’s restructured bonds.
“It’s about each side’s image, about them blaming each other, trying to improve their standing,” he said.
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