Argentina accuses US of judicial malpractice for triggering needless default

http://www.telegraph.co.uk/finance/financialcrisis/11004486/Argentina-accuses-US-of-judicial-malpractice-for-triggering-needless-default.html

Argentina accuses US of judicial malpractice for triggering needless default
Country threatens to take US to The Hague after defaulting on its debts for the second time in 12 years


Ambrose Evans-Pritchard By Ambrose Evans-Pritchard
7:56PM BST 31 Jul 2014

Argentina has threatened to take the US to the International Court of Justice for judicial malpractice, accusing the country of gross incompetence for allowing two small hedge funds to push the Argentine state into default, regardless of the mayhem caused for other creditors and the damage to ordinary people.

The bitter attack came after a New York court prevented Argentina paying $539m to its creditors even though the Peronist government of Cristina Kirchner wants to do so, in the latest bizarre development in the country’s long struggle to regain access to global capital markets.

Judge Thomas Griesa said Argentina must first pay $1.5bn in arrears to “hold-out” investors who never accepted a restructuring deal following Argentina’s last default 12 years ago, even though many scooped up the bonds for a fraction of their face value during the crisis.

Standard & Poor’s immediately declared the country to be in “selective default” after a last-minute compromise collapsed and the deadline passed on Wednesday night. Fears of a chain reaction set off panic in Buenos Aires, where the Merval index of stocks fell 7pc and leading banks plunged 12pc. Other markets suffered, too, with America's Dow Jones Industrial Average down 1.6pc in late trading. All major European markets fell, too.

“To say that Argentina is in technical default is a ridiculous hoax,” said Jorge Capitanich, Argentina’s cabinet chief, accusing Judge Griesa of acting as an “agent” of speculative funds. “There’s been mala praxis here by the US justice system, for which all three branches of the government are responsible. Argentina has tried to negotiate in good faith,” he said.

Mr Capitanich said Argentina is considering calling for a debate at the United Nations and launching an appeal at the International Court of Justice in The Hague. “We can’t have a global financial system that lets a miniscule group of funds undermine the process of debt restructuring,” he said.


The default will almost certainly push the country deeper into recession but is nothing like the traumatic events of 2000-2002 when Argentina’s GDP contracted by 11pc. Police lost control of the streets and president Fernando de la Rua had to be rescued from the roof of his mansion, Casa Rosada, in an air force helicopter. The country then defied the world, imposing a 70pc haircut on bondholders in the biggest debt repudiation in history.

This time Argentina is widely seen as the victim of sharp practice. “This has been forced upon Argentina by predatory speculators. Paying the vulture funds would be disastrous, making it harder for countries across the world to resolve future debt crises,” said Sarah-Jayne Clifton, from the Jubilee Debt Campaign.

Axel Kicillof, the economy minister, said Argentina has been paying interest willingly to 92pc of bondholders who accepted deals to restructure the country’s debt in 2005 and 2010, but could not settle with “vulture funds” without setting off an avalanche of claims that could cost the country more than $100bn.

So-called RUFO (rights upon future offers) clauses in the restructured bond stipulated that these bondholders must be offered the same terms as the hold-outs, though some have already said they would waive their rights to help break the deadlock. The hold-out funds NML Capital and Aurelius Capital Management say they offered a compromise through a court-appointed mediator but Argentina refused to give any ground.

In a sign of how Baroque this saga has become, Argentina actually tried to wire the payment to US banks in New York but the money was returned in order to comply with a court order, leaving it unclear whether this will trigger credit default swaps on Argentina’s debt worth $1bn. The Argentine press said the government may pay the interest into an escrow account to maintain the goodwill of the main bondholders.

Neil Shearing, from Capital Economics, said the impasse is likely to last months, with Argentina stuck in limbo until these RUFO clauses expire at the end of the year. “The longer the dispute goes on, the greater the economic damage. Our forecast is for GDP to contract 1pc this year,” he said.

The interminable drama is a reminder of how difficult it can be for a country to regain its footing in financial markets if it breaks the taboo and carries out a unilateral default outside the auspices of the International Monetary Fund.

Countries that turn to the IMF usually recover trust quickly. Uruguay was able to borrow again within a year after defaulting in 2003 because it was seen to have behaved honourably, even heroically. Argentina is still shut out of global capital markets 12 years later.

Although Argentina recovered during the global commodity boom – crucially after breaking free of its deflationary dollar peg – it has been left far behind by well-managed states like Chile. It has never been able to develop its shale industry because it cannot borrow abroad, and remains stuck in a low-growth trap.

The peso was devalued by 20pc in January. Foreign reserves have fallen to three months import cover, money is leaking out in capital flight and the current deficit is nearly 3pc of GDP. The economy is now in the grip of old-style Latin American stagflation, with GDP contracting even as prices rise by 2pc a month.

For the country that was one of the five richest nations in the world in 1900 and once seemed like Australia’s economic twin, the lurch from crisis to crisis since the 1940s is a textbook study of bad government.

11 countries near bankruptcy

http://finance.yahoo.com/news/11-countries-near-bankruptcy-223350842.html

Fri, Aug 1, 2014, 3:28 PM EDT

11 countries near bankruptcy
24/7 Wall St. By Alexander E.M. Hess and Alexander Kent
6 hours ago

After years of bitter court battles with creditors, Argentina has defaulted on its debt, according to rating agency Standard & Poor’s. After failing to come to an agreement with creditors from its previous default in 2001, the country missed necessary bond payments on July 31, triggering the default announcement. As of publication, other organizations, most notably the rating agency Moody’s Investors Service and the International Swaps and Derivatives Association, a derivatives trade group, have yet to release public statements confirming the default.

Argentina is not the only country that has struggled, or even failed, to pay its debt in recent years. It is hardly the only country with a severely impaired credit rating either. Alongside Argentina, Moody’s currently lists 10 other countries with a rating of Caa1 or worse. A Caa1 rating is several notches below Ba1, which still carries substantial credit risk. Based on ratings from Moody’s Investors Service, these are the 11 countries at risk of default.

The countries with the lowest credit ratings significantly differ from one another. They span the globe, ranging from Greece and Ukraine in Europe, to Pakistan in Asia, to Ecuador, Venezuela, and Belize in South America.



These nations also suffer from vastly different problems. Some nations, such as Ukraine and Egypt, owe their recent downgrades to political conditions. Others, such as Belize and Ecuador, have actually been upgraded in recent years based on their improved financial positions.

When a government has a great deal of debt relative to the size of its economy, its credit rating may also be lower. Three of the nations potentially at risk of default had among the world’s highest debt levels, at 120% of GDP or more based on 2014 estimates. According to the International Monetary Fund (IMF), Greece’s debt is projected to hit nearly 175% of GDP by the end of this year, more than that of any other nation in the world except for Japan.

However, not all countries with low ratings necessarily have a large amount of outstanding government debt. For example, Ecuador’s government debt, according to the IMF, was forecast to total just 24.8% of GDP in 2014 -- an exceptionally low amount. In many cases, these countries simply do not regularly access international bond markets, either because of small financial sectors or because of debt-restructuring agreements.

Borrowing funds in the international bond market can be quite expensive for countries with poor credit ratings. Countries have to pay high interest rates on their debt because because investors require greater returns on what they perceive to be riskier investments. For example, a 10-year U.S. Treasury Note pays an annual coupon of just 2.5%. By contrast, a comparable bond recently issued by Jamaica pays out 7.65% a year. In Greece, yields on 10-year government bonds reached 29% in early 2012, right before the country defaulted.

Often, countries that tap into international bond markets do so in other currencies. For example, nations such as Argentina, Jamaica, Belize, and Ukraine have all issued bonds in other nations’ currencies. The main reason to use common currencies -- such as the dollar, yen, and euro -- is that their inflation rates are typically far lower than the currencies of the issuing countries. This means that investors do not need to worry as much about their investment losing value.

In fact, inflation is a major problem in several of the countries with the worst credit ratings. In one such nation, Venezuela, inflation is expected to exceed 50% in 2014, according to the IMF. Argentina's inflation rates are likely much higher than reported by government statistics on consumer prices, which were long considered highly unreliable.

Based on credit ratings provided by Moody’s Investors Service, 24/7 Wall St. reviewed the 11 countries with credit ratings of Caa1 or worse. A rating of this level indicates considerable credit risk. Because many of these nations have significant debt in other currencies or have otherwise weak currencies, we used foreign currency ratings and outlooks for these nations. Figures on GDP growth, inflation, unemployment, population and debt levels are estimates for 2014 from the IMF’s World Economic Outlook.

These are the 11 countries at risk of default.

Ecuador
> Moody’s credit rating: Caa1
> Moody’s outlook: Stable
> 2014 Gov’t debt (pct. of GDP): 24.8%
> 2014 GDP per capita (PPP): $10,492


When Ecuador last defaulted in 2008, President Rafael Correa described the nation’s debt as “immoral” and “illegitimate.” The country's past debt sales had been tainted by corruption, Correa said at the time. Since 2008, Ecuador’s Moody’s credit rating has steadily risen, reaching Caa1 in 2012. Earlier this year, the country both bought back a substantial fraction of its defaulted debt and issued new bonds for the first time since its previous default. According to figures from the IMF, Ecuador's economic growth has been relatively healthy in recent years. GDP grew by 5.1% in 2012 and by an estimated 4.2% last year. GDP is forecast to rise by 4.2% again in 2014.

Egypt
> Moody’s credit rating: Caa1
> Moody’s outlook: Negative
> 2014 Gov’t debt (pct. of GDP): 91.3%
> 2014 GDP per capita (PPP): $6,696

Political unrest in Egypt in recent years has made investors wary, leading Moody’s to downgrade Egyptian debt to Caa1 in March 2013. Fears were further compounded by currency devaluation as Egyptians moved their assets into U.S. dollars and out of Egyptian pounds. But despite the country’s low credit rating, yields on Egyptian bonds fell below 5% in June. This may be an indication that investors are less concerned about the risk of political instability in the country. And while its outlook remains negative, Moody’s recently praised Egyptian President Abdel Fattah el-Sisi’s commitment to reduce the government’s budget deficit in the fiscal year starting on July 1, 2014.

Pakistan
> Moody’s credit rating: Caa1
> Moody’s outlook: Stable
> 2014 Gov’t debt (pct. of GDP): 63.7%
> 2014 GDP per capita (PPP): $3,231

This April, Pakistan issued its first bond in seven years, raising roughly $2 billion in dollar-denominated debt. Pakistan has a multi-billion dollar line of credit with the IMF, but loans are conditional on the country enacting structural reforms to its economy. Pakistan was at risk of default last year until the IMF agreed to lend it money. Tax collection remains a major problem in the country. According to The Express Tribune, only roughly one in 200 citizens even files an income tax return. The country’s total debt amounts to roughly 64% of its annual GDP, even as government spending for 2014 is estimated to be among the world’s lowest, at roughly 20% of GDP.

Venezuela
> Moody’s credit rating: Caa1
> Moody’s outlook: Negative
> 2014 Gov’t debt (pct. of GDP): 51.6%
> 2014 GDP per capita (PPP): $13,531

Venezuela’s need for short term cash may lead to trouble in future years. President Nicolas Maduro’s administration plans to issue bonds through the state-owned oil company, Petroleos de Venezuela, to increase the availability of foreign currency in the country. More foreign currency may help tame inflation in Venezuela, which stood at 40.7% in 2013. However, according to Bloomberg, the rate at which the oil company is taking on debt will likely outpace oil revenues in the coming years, making it increasingly difficult to make future loan payments. Venezuela is expected to spend less than 2% of GDP on interest payments in 2014, a number that is likely to balloon if the country continues to rapidly issue debt. Venezuela also has the highest 10-year bond yields in the Western Hemisphere at 15.81% as of June 2014.

Argentina
> Moody’s credit rating: Caa1
> Moody’s outlook: Stable
> 2014 Gov’t debt (pct. of GDP): 52.9%
> 2014 GDP per capita (PPP): $18,917

Argentina’s current problems can be tied back to 2001, when the nation defaulted on about $100 billion worth of debt. While most of the nation’s bondholders at the time agreed to restructure their debt, a few investors refused. After a U.S. court ruled in 2012 that Argentina should not pay its current bondholders without paying the holdouts as well, the country has faced the prospect of yet another default. On July 30, Standard & Poor’s stated that Argentina had defaulted. Other relevant financial bodies, such as the International Swaps & Derivatives Association, are also expected to declare Argentina has defaulted. Argentina has been beset by economic problems for years. Inflation was widely-believed to be well in excess of the government’s reported rates, and Argentina has deliberately devalued its currency, the peso.

Belize
> Moody’s credit rating: Caa2
> Moody’s outlook: Stable
> 2014 Gov’t debt (pct. of GDP): 80.4%
> 2014 GDP per capita (PPP): $8,915

Belize is a tiny Latin American nation with a population of less than half a million residents. The country has suffered from debt problems for years, first defaulting nearly a decade ago, after which it consolidated all of its international debts into a single bond. The country missed a payment on this “superbond” in August 2012, leading to a 2013 debt restructuring that resulted in a longer repayment time, a haircut to the bond’s overall value, and smaller payments for bondholders. Following the restructuring, Moody’s upgraded Belize’s credit rating to Caa2 with a stable outlook. The IMF projects that Belize’s total gross debt will reach 80.4% of GDP by the end of 2014.

Cuba
> Moody’s credit rating: Caa2
> Moody’s outlook: Stable
> 2014 Gov’t debt (pct. of GDP): N/A
> 2014 GDP per capita (PPP): N/A

In April, Moody’s downgraded Cuba's credit rating to Caa2 with a stable outlook. Weaknesses cited by Moody’s at the time included “limited access to external financing, high dependence on imported goods, political transition risk, and lack of data transparency.” Recently, Russia announced it had written off most of Cuba’s debt, significantly cutting the country’s obligations. Cuba does not pay interest on its debt and its bonds are rarely traded. The IMF does not collect figures for Cuba, which is not a member of the IMF and World Bank.

Cyprus
> Moody’s credit rating: Caa3
> Moody’s outlook: Positive
> 2014 Gov’t debt (pct. of GDP): 121.5%
> 2014 GDP per capita (PPP): $24,171

In March of last year, Cyprus received a 10 billion euro loan from the IMF, the European Central Bank, and the European Commission to save its banking system from bankruptcy. Just over a year later, Cyrus returned to global debt markets, raising $1 billion in five-year bonds yielding less than 5%. This was a moderate victory for the Mediterranean island country as its five-year bond yields neared 14% in prior years. Despite rating its bonds as Caa3, the lowest rating before default, Moody’s has a positive outlook on the country. The country’s improving economic performance, coupled with historically low interest rates in other eurozone countries, will likely push more adventurous investors towards Cyprus to take advantage of higher yields.

Greece
> Moody’s credit rating: Caa3
> Moody’s outlook: Stable
> 2014 Gov’t debt (pct. of GDP): 174.7%
> 2014 GDP per capita (PPP): $24,574

Once the poster child of economic calamity, Greece's efforts to restructure its debt and impose economic discipline are paying off. In April of this year, Greece returned to international bond markets after a four-year hiatus, raising nearly $4.2 billion in an oversubscribed issue of five-year bonds with a yield below 5%. According to Greece’s Finance Ministry, almost 90% of bonds were issued to investors outside of Greece, indicating that international investors are beginning to view Greek government bonds as a good investment. While this is good news, Greece still has more work to do. The country's unemployment rate remains above 26% and deflation currently threatens to further depress demand.

Jamaica
> Moody’s credit rating: Caa3
> Moody’s outlook: Positive
> 2014 Gov’t debt (pct. of GDP): 133.7%
> 2014 GDP per capita (PPP): $9,256

Jamaica re-entered the global bond market in July 2014 with a bang, raising $800 million, which was well above the $500 million expected by government officials. The expanded deal indicates that investors are excited about investment opportunities in Jamaica. The country’s improving economy may explain some investor exuberance. Despite slow growth and an unemployment rate that has been consistently above 11% since the global recession, Jamaica has reduced government expenditure as a share of GDP from 38.6% in 2009 to an estimated 26.9% this year. Additionally, the Jamaican government expects its budget deficit to be nearly balanced in 2014.

Ukraine
> Moody’s credit rating: Caa3
> Moody’s outlook: Negative
> 2014 Gov’t debt (pct. of GDP): N/A
> 2014 GDP per capita (PPP): N/A

Following the ouster of President Viktor Yanukovych in February, who was a close ally of Russian President Vladimir Putin, the political crisis in Ukraine has largely escalated. In March, Russia annexed the Ukrainian peninsula of Crimea in the Black Sea, from Ukraine. Violence between the government and pro-Russian separatists has also been rampant in eastern Ukraine. Financially, Ukraine’s relationship with Russia is also complex. Russia lent its neighbor $3 billion last December, when Yanukovych still ran the country. The bond deal contained a clause triggering automatic full repayment if Ukrainian government debt exceeded 60% of GDP, alongside other conditions that have worried several debt market experts. Due to the ongoing crisis, Moody’s downgraded Ukraine’s credit rating, and the IMF excluded projections for Ukraine from its most recent World Economic Outlook report.

Argentina Default Imminent as Talks Collapse

http://online.wsj.com/articles/argentina-bonds-rise-to-multiyear-highs-on-prospect-of-deal-1406728458

Argentina Default Imminent as Talks Collapse
Setback Sends Argentine Shares Down in After-Hours Trading

By NICOLE HONG, TAOS TURNER and MATT DAY CONNECT
Updated July 31, 2014 3:45 a.m. ET

Argentina faces default Wednesday for the second time in 13 years if it doesn't meet a deadline to make payments to a small group of bondholders. WSJ's Matthew Cowley explains Argentina's dispute with these creditors and the long-standing battle that stems from the country's default in 2001. (Photo: Getty Images)

Argentina teetered on the brink of its second default in 13 years after talks with bondholders collapsed late Wednesday.

The setback, after glimmers of hope in recent days that a last-minute agreement could be reached, immediately sent Argentine stocks plunging in after-hours trading.

Still, there remained the possibility that talks could resume and a deal could eventually be reached.

At a press conference after talks with a court-appointed mediator ended Wednesday, Argentine Economy Minister Axel Kicillof, who had led the country's delegation to New York, said "we won't sign an agreement that would compromise Argentina's future." A spokeswoman later said negotiations would continue, without giving a timetable.

"Default is not a mere 'technical' condition, but rather a real and painful event that will hurt real people," said Daniel Pollack, the mediator, in a statement late Wednesday. He added, "The full consequences of default are not predictable, but they certainly are not positive."

The development is the latest turn in a years long battle between Argentina and a small group of hedge funds that have demanded full payment for bonds the country defaulted on in 2001. Argentina has refused to pay, despite an order by a U.S. District Court judge requiring it to pay the hedge funds. The issue came to a head Wednesday as Argentina missed a deadline to make a payment it owed to other bondholders, because the court order had prevented such a move.


Mr. Pollack, who had been trying to broker a deal between the two sides, said the country would "imminently" be in default. Standard & Poor's Ratings Services had earlier Wednesday declared Argentina in default on some of its bonds.

A default would pressure an economy already mired in recession, potentially leading to higher inflation and a weaker currency. The breakdown of negotiations also complicates President Cristina Kirchner's efforts to stabilize the economy ahead of elections next year.

Wednesday marked the end of a 30-day grace period for Argentina to make a $539 million interest payment to the holders of $29 billion of the country's restructured bonds that was due on June 30. A ruling by U.S. District Judge Thomas Griesa prevents Argentina from paying its restructured bondholders until the hedge funds, also known as the holdout creditors, are compensated. The holdout creditors are owed about $1.5 billion.

Mr. Kicillof hinted on Wednesday that a private-sector solution was a possibility, apparently referring to a proposal by a group of Argentine banks to offer a $250 million guarantee to the holdouts. The idea would be to give the hedge funds a financial incentive to ask Judge Griesa to suspend his ruling until the end of the year and allow payment of holders of the other bonds.

A default could shave as much as one percentage point off growth this year, said Martin Redrado, former governor of Argentina's central bank. Analysts said it would also fuel inflation, which some economists already estimate to be close to 40%, and deepen the country's recession. It could roil the country's financial markets, ending a period of relative calm in the peso's exchange rate and Argentine bond prices.

The U.S.-traded shares of prominent Argentine financial services and energy firms were hit Wednesday in after-hours trading. Grupo Financiero Galicia SA was recently down 22%, while Banco Macro SA fell 13%. Electricity firm Pampa Energia SA fell 18%, and oil and gas producer YPF S's shares fell 7.7%.

The economic damage from a prolonged default could prove politically costly for Mrs. Kirchner, who is trying to stabilize a shaky economy and win influence for her party ahead of presidential and congressional elections in October 2015.

Even if Argentina reaches a deal with holdouts, it likely won't be enough on its own to right the country's finances, said Roberto Sifon-Arevalo, head of the Latin America sovereign group at S&P.

A deal "would definitely be a good thing. I don't think that it would automatically be a solution, or a dramatic game-changer," he said. "The macroeconomic environment in the country has deteriorated significantly. It's weak and getting weaker. This situation certainly does not help."

Timeline: Argentina vs. Bondholders

The immediate impact to debt markets outside Argentina is expected to be limited. Argentina has been relatively isolated from global financial markets since its default in 2001, and the country's legal battles with its creditors are unprecedented and have dragged on in U.S. courts for years. In 2001, the country's bonds made up 20% of J.P. Morgan Chase JPM & Co.'s widely followed emerging-market debt index. Now, they are only 1.3% of the index, signaling little chance that another default would rattle the global economy.

"I don't think this is going to have much repercussion outside of Argentina," said Clyde Wardle, a senior currency strategist with HSBC Holdings PLC.

However, the case has raised questions about the power of U.S. courts to adjudicate cases involving sovereign nations and their creditors.

The concerns stem from the controversial 2012 ruling made by Judge Griesa, who has presided over disputes between Argentina and its creditors for more than a decade. He ruled that Argentina isn't allowed to pay the bondholders who accepted the country's restructuring offers since its 2001 default, unless it also pays the holdouts, who have refused those offers.

Lawyers said the ruling marked the first time a U.S. judge had issued such an injunction on the so-called "pari passu" clause of bond contracts, which states that all bondholders must be treated equally.

The U.S. government has called Judge Griesa's ruling "impermissibly broad" and said it could undermine U.S. foreign relations. The International Monetary Fund warned that Judge Griesa's ruling could make it easier for a handful of creditors to disrupt other debt restructurings. "There is a cost to the world," IMF Chief Economist Olivier Blanchard said last week.

Analysts say Wednesday's developments will likely rock Argentine markets on Thursday, as the country's stocks and bonds had rallied this week on hopes that the two sides would reach a deal and avert default. Investors said they had been encouraged by marathon talks on Tuesday and Wednesday between Argentine officials and a court-appointed mediator, as well as a proposal by Argentine banks to pay the holdout creditors.

"The market reaction won't be positive," said Brian Joseph, head trader at local brokerage Puente. "There were big expectations of a deal. This isn't good news."

Protesters in Argentina hold a mock vulture as they demonstrate against holdout investors locked in a legal battle with the country. Reuters

There are many investors who have actually bet on an Argentine default through so-called credit default swaps, but it could be days before those investors find out whether they can collect on their bets. Decisions about CDS payouts are made by a panel convened by the International Swaps and Derivatives Association, a financial trade group. There are $20.7 billion of CDS outstanding on Argentine government debt, according to Depository Trust & Clearing Corp.

The idea of default isn't much of a concern for many Argentines, who have lived through much greater crises over the decades and are adept at adapting to economic setbacks.

"We talk about this as if it's something normal. I'm not losing any sleep over it," said Juan Chamale, 36, who works at a Kodak store in downtown Buenos Aires. "We're very used to this kind of thing and have learned to take it in stride."

Argentina's default in 2001 led to the country's worst economic slump since the Great Depression. At the time, it was the largest sovereign default in history and triggered dozens of lawsuits against Argentina by creditors around the world.

After years of contentious talks, the country persuaded approximately 93% of its bondholders to take heavily discounted restructured bonds in exchanges held in 2005 and 2010. But a small group of investors refused to take the new bonds, with many suing in U.S. courts for full repayment. These included hedge funds led by Elliott Management Corp.'s NML Capital Ltd. and Aurelius Capital Management Ltd.

U.S. courts had jurisdiction over these lawsuits because Argentina had agreed in some of its bond contracts to resolve any disputes under New York law.

After Argentina denounced several U.S. court rulings awarding judgments to creditors and consistently refused to pay the holdouts, Judge Griesa issued his unprecedented 2012 ruling that barred Argentina from paying its restructured bondholders until it pays the holdouts.

For the next two years, Argentina tried every legal avenue to appeal the decision. But the Second Circuit Court of Appeals upheld Judge Griesa's ruling, and the U.S. Supreme Court in June declined to hear Argentina's appeal.

Meanwhile, the holdout hedge funds chased Argentine assets around the globe in an attempt to get paid. NML seized an Argentine navy training vessel in 2012 and this year tried to block the country from launching a pair of satellites. Other creditors attempted to seize the presidential plane in 2007.

—Ken Parks, Shane Romig, Dan Strumpf and Katy Burne contributed to this article.