Argentine warrants more than double after ruling favours Aurelius

Notes with payouts tied to Argentina’s economic growth surged as much 107 percent on Thursday after a US court ruled the country will be required to show how it calculated statistics at the centre of a legal battle between hedge fund Aurelius Capital Management LP and the South American nation.

Its warrants tied to gross domestic product surged to their highest since March 2020, with dollar-denominated warrants due in 2035 jumping as much as 107 percent, and euro-denominated securities climbing 42 percent.

Argentina will need to reveal the methodology it used to measure GDP and economic activity in 2013, according to a ruling from a federal court in New York published on Wednesday. The court will also require Aurelius to hand over documents related to its purchase of the securities at the centre of the case.

The New York-based hedge fund claims then-president Cristina Fernández de Kirchner’s administration misrepresented GDP figures that year to avoid paying holders of the securities billions of dollars they were owed. The warrants, which trigger payouts when specific growth thresholds are met, were offered to creditors in a restructuring after Argentina defaulted on US$95 billion of debt in 2001.

The hedge fund alleges that fudged statistics from Fernández de Kirchner, who is now vice-president, prevented the firm from cashing in on a roughly US$61-million payout. Argentina has said in court filings that it made all required payments tied to the warrants, totaling nearly US$10 billion, and has asked the judge to dismiss the claims. The court denied that request earlier this year.