Argentina lost a lawsuit in the London High Court over payments of “GDP coupons” to four funds. These are values denominated in euros linked to the gross domestic product (GDP) of Argentina in 2013. The cause stems from the manipulation of the INDEC figures and the accusation that the Argentine State modified the way of calculating the Gross Domestic Product to avoid paying interest on a debt issued in 2005, as an exchange of the titles in default in 2001.
As reported by the international agency Reuters, the funds Palladian Partners, HBK Master Fund, Hirsh Group and Virtual Emerald International Limited sued the country in 2019, requesting compensation of up to 643 million euros (USD 704 million).
The judge in the case, Simon Picken, ruled in favor of the four funds and ruled that Argentina had to pay about 1,330 million euros relative to all GDP-linked securities, of which the four funds hold approximately 48%. In dollars, the figure amounts to almost $1.5 billion at the current exchange rate.
The Marketable Securities Linked to GDP are instruments used in 2005 by the then Minister of Economy, Roberto Lavagnaand Secretary of Finance, william nielsen. It determined payments to bondholders when economic growth for the year exceeded 3%. they were nicknamed as “GDP coupons”
The GDP data published by INDEC were affected by the manipulation of inflation statistics in which the agency incurred since 2007 and, with them, the meaning of the coupons was distorted. In March 2014, the former Minister of the Economy and current Governor of Buenos Aires, Axel Kicillofannounced that economic growth in 2013 had been 3%, less than the 3.2% necessary for the payment of the GDP Coupon to be executed -in December of that same year-, for a total of USD 3,000 million.
A month earlier, in February, INDEC maintained that the economy had grown 4.9% in 2013, according to the estimate made based on calculations in 1993, but since January 1, it was decided to apply a new methodology to calculate GDP. , based on 2004.