Argentine EUR-denominated GDP Warrants Palladian Partners LP & Ors v The Republic of Argentina & Anor FL-2019-000010; CA-2023-001273

LONDON, April 15, 2025 /PRNewswire/ -- Aidan O'Rourke, Partner at Quinn Emanuel Urquhart & Sullivan, on behalf of the Claimants in the above proceeding said:

The Claimants, on behalf of all holders of Argentina EUR-denominated GDP warrants, wish to make the following statement to provide clarity to the market in relation to the EUR 1.53 billion debt outstanding in respect of the Payment Amount for Reference Year 2013 and broader issues regarding Reference Years 2014 onwards.

The IMF, in its Staff Report dated 7 April 2025 in relation to Argentina's request for an arrangement under the Extended Fund Facility, explicitly and correctly included the final judgment of the English court against Argentina in respect of the EUR GDP warrants for Reference Year 2013 as a component of non-contingent sovereign debt which is included in the IMF's Debt Sustainability Analysis for the country.  The Claimants welcome that confirmation, which is in accordance with the IMF's guidance on what constitutes non-contingent sovereign debt. 

The Staff Report also states that "negotiations are underway to define a repayment schedule".  The Claimants confirm that they and Argentina have met to discuss repayment of the US 1.53 billion outstanding for Reference Year 2013 as well as broader issues regarding subsequent Reference Years which are subject to different calculations.   Argentina has also acknowledged that the 2013 Payment Amount is outstanding and needs to be repaid.

However, as of yet, Argentina has made no proposal to the Claimants for repayment, nor has it engaged with any particularity in response to proposals made by the Claimants.  Rather, Argentina's  representatives only suggested that Argentina remains willing to discuss the matter in good faith, but would not be ready to do so prior to finalising its arrangements with the IMF.

With the arrangements under the Extended Fund Facility now concluded, a step the Claimants applaud, the Claimants reiterate their readiness to initiate conclusive, good faith discussions to resolve the matter of the amounts outstanding for Reference Year 2013 and all other aspects of the English Court judgment, as well as the future functioning of the warrants until their expiry in 2035. The Claimants call on Argentina to engage on a timely basis in order that this obstacle to Argentina's return to the capital markets may be removed. 

The 2013 Payment Amount under the EUR-GDP warrants has been outstanding now for more than 10 years, and warrant holders should be paid the sums owing under those sovereign debt instruments.  Similarly, agreement should be reached that resolves disputes as to the methodology for the calculation of the Payment Amounts for Reference Years after 2013.  The English Court has ordered that methodology should match, as closely as possible, the methodology used prior to Argentina's 2014 GDP rebasing, and it plainly affects the value of the warrants, which do not expire until 2035.

Link to IMF Staff Report:

https://www.imf.org/en/Publications/CR/Issues/2025/04/12/Argentina-Request-for-an-Extended-Arrangement-Under-the-Extended-Fund-Facility-Press-566151

Extract from IMF Staff Report (page 18, footnote 18)

Argentina faces litigation cases in New York related to (i) claims regarding the treatment of GDP-linked warrants issued in the 2005 debt exchange; and (ii) losses by former YPF shareholders, following the nationalization of the energy company in 2012, where the country was found liable for US$16 billion, but it has since appealed the ruling. Staff will continue to treat the pending non-finalized cases as contingent liabilities. A final judgment was delivered against Argentina in London (on GDP-linked warrants), with the country liable for EUR1.6 billion where negotiations are underway to define a repayment schedule, this finalized litigation has been added to DSA's public debt baseline.

Aidan O'Rourke
Quinn Emanuel Urquhart & Sullivan UK LLP
90 High Holborn, London WC1V 6LJ
E-mail: [email protected]
Phone: +442076532019

SOURCE Quinn Emanuel Urquhart & Sullivan UK LLP