Burford Capital Share Discussion Threads

[donald pond] 28/12/2023 11:36

How Argentina raises the money is really only of tangential interest to us. Burford is entitled to collect the award in full. We don't need to do anything. We certainly don't need to accept bonds of any sort.
The amount they own is equivalent to around 3% of their GDP. So it is certainly affordable. It might not be easy, but if I was Argentina I'd be looking for something that showed willing. What is important is not that there is a deal but that Argentina appears to have gone past the denial stage.

[rider75] 28/12/2023 11:30

Issuing a bond is unnecessary if they want to change their liability stem from the claim to the bond toward the plaintiffs. They should issue a bond to gather the necessary capital to settle the claims.

[three black crows] 28/12/2023 11:08

Looks like the share price reacts to positive news even though there is no deal yet.

[laughton] 28/12/2023 11:06

So what? You think that the BUR share price would react positively to them accepting coupons on bonds issued by Argentina in settlement of their award?

[reddirish] 28/12/2023 10:40

The statement was that Argentina is discussing 'issuing' a perpetual bond with the coupon paid via a local tax. There would be no capital raised on the markets but rather an annual coupon paid in perpetuity, with that $16b (soon to be $17b) remaining as a liability to Argentina and as an asset to the plaintiffs. The plaintiffs would have to ensure that it didn't fall under the rules for sovereign debt so that in the (likely) case of default they could still act on recovery. They could of course sell their rights to the coupon if they choose, but maybe BUR would find useful an additional $300-$400m annual boost to earnings from the bond income. That could fund a lot of new business plus some tasty shares buy backs of the share price didn't respond. It's an interesting start point for negotiations for sure.

[donald pond] 28/12/2023 10:09

Remember, this is a US court judgment. It cannot be time barred or avoided in any way. Burford can wait and the interest will accrue. The only reason to accept a small haircut is if we get paid in full, promptly.

[extrader] 28/12/2023 09:55

Maybe BUR could compromise on a discount, for part (early) settlement but with a 'return to better fortunes' clause that gave a second bite of the cherry if the country's economy improved?

The argument being that it would be THIS settlement that is the starting gun for the country's turn-around...

BUR is incentivised to go for a 'prompt payment' deal because of the capital that it could (a) redeploy into other assets and (b) make a special dividend to shareholders (and management); while (c)removing the 'one trick pony/YPF overhang' would surely prompt a re-rating as investors looked at BUR's other 3 pillars....all the while keeping (d) a free warrant to encash in any upside.

I'm sure there'd be a market for (d)

AFAICS

[extrader] 28/12/2023 09:35

Agreed. But definitely better than when the Chambers were shut;->!

ATB

[tomtrudgian] 28/12/2023 08:54

The bicameral (2 chambers) Argentinian Congress has to agree to the bond. They are both normally closed for ordinary sessions between 1 Dec and 28 Feb for their summer, unless the president decrees otherwise.

He has just done so, and ‘extraordinary’ sessions will now be arranged for the period until 31 Jan. Presumably to authorise, or not, the proposed dollarisation, bond, international trade prospects and stable rehabilitation.

The likelihood of success is not remotely certain in my view.

[rider75] 27/12/2023 23:16

Laughton I am almost sure you are right. A bond issue could only be the funding source of payment(s), and it will not be handed to the plaintiffs and BUR in exchamge of their current claim. The latter would make them a simple creditor instead of this commercial claim and judgement.

[rider75] 27/12/2023 22:00

It didnt age well, and thats a huge understatement..
Instead that was close to an instant karma...:-)

[extrader] 27/12/2023 20:09

I think that one scenario is Burford Capital (LON:BUR) finding a Sovereign Wealth Fund (SWF) that isn't subject to the commercial pressures (time, accounting, politics etc) that BUR itself faces and would take Argentina risk in pursuit of longer term not-necessarily-purely financial returns.

Take on Argentina debt for influence or a stake in the vast natural resources that the country has, for example : the Arabian Gulf has several SWF's who have a strategic interest in agriculture; an historic interest/expertise in hydrocarbons/petrochemicals; a current interest in 'green' technology; an economic /political interest in de-dollarisation and encouraging south-south trade. Argentina, along with Saudi and the UAE has recently joined the BRICS group, which is so far more an aspiration than a reality.

Some kind of a deal might tick a lot of boxes for an SWF investment committee, whether it be the one already working with BUR (identity unknown) or a.n.other.

The right deal would attract enormous publicity/kudos and could also - incidentally - be very profitable, which wouldn't harm its chances with the decision-makers...or (in the case of some of the Gulf SWF's ) the decision-maker.

I hold.

AFAICS/IMO etc etc

[djderry] 27/12/2023 19:27

Interesting also to read back on Jay Newman's article in the FT ' Dog catches Argentine car' to see how wrong he's been,with the ink hardly dry on the article.Yet another mis-mash as to why Burford will not get paid very much,if ever.And then the President expresses ( in English,no less,to make sure we all understand) his ' willingness to pay'.Time for a follow up article Mr.Newman? Perhaps the title could be ' How I got it so wrong.'

[planit2] 27/12/2023 19:10

It doesn't make sense for there to be a complicated payment plan with Burford who don't want the debt on their books.
Much more likely what gusrezo mentions, a perpetual bond is constructed that can be sold into the market either by Argentina or more likely Burford. The bond coupon and face value will be negotiated.

The comments make it sound like Argentina is not going to play such hardball any more, they are using this as an example that they will pay their debts (which is great for the parties involved if it happens).

[lomax99] 27/12/2023 18:45

Agree Burford should have a clear path to monetising in USD any bonds ASAP. Given Argentina's track record, any discount to nominal is likely to be high.

[gusrezo] 27/12/2023 18:34

Repsol was discussing with investment banks the way to monetize the bonds at the same time it was discussing with Argentina the settlement. Once it was clear for Repsol that there was a willing buyer of the bonds, the offer from Argentina was accepted.And then Repsol got rid off the bonds in 4 days.
BUR should follow the same strategy: a clear path to monetize inmediately the bonds it could receive. Otherwise, I really hesitate that the bonds will be accepted.

[laughton] 27/12/2023 18:10

Excuse me for being stupid but how would BUR accepting a bond leave them in any better position than they are now?

My reading of the original "bond announcement" was that Argentina would issue bonds and pay BUR out of the money raised.

[djderry] 27/12/2023 17:24

Re future payment plan and risk of default,Artem Fokin ( hedge fund investor/lawyer) has discussed this extensively. Quite straightforward to have written into the terms that,should an annual payment not be forthcoming by,say,30 days after due date,the original ( ie,$16 billion plus post judgement interest becomes due).Carrot and stick.

[gusrezo] 27/12/2023 17:15

Remember that Repsol received also bonds and sold it inmediately. Quite sure Burford will follow the same path in case this is the final solution: an agreement with an investment bank that allocates the bond to customers or its own portfolio. Probably they are already polling the market to check whether there're willing counterparts.

"wo years after the expropriation of 51% of YPF's shares in April 2012, Repsol and the Argentine Government agreed to compensation of 5,000 million dollars (about 3,700 million euros), which was recognized as debt and would be settled through the delivery of sovereign debt securities.

To guarantee the effective payment of this amount, Argentina delivered 5,317 million dollars in bonds on May 8 2014, since the initial package of 5,000 million planned did not reach the agreed minimum market value.

On Friday, May 9, just one day after receiving the securities, the company sold Argentine bonds to JP Morgan for $2,813.6 million and four days later announced an agreement to transfer securities for another $2,010 million."

[papy02] 27/12/2023 17:12

To me, a perpetual bond means raise capital by selling a bond, then use that capital to settle existing debt.

Agreeing an interest-only payment-plan with BUR is something else entirely. I’m not sure why we are discussing that?

What exact words were used ?

[chester9] 27/12/2023 16:53

Read Seb posts

[malc999] 27/12/2023 16:43

I suspect the mention of a perpetual bond is nothing more than an opening offer in the negotiation process, which will most likely be rejected by BUR. A risk for this type of bond is that a future administration could stop or suspend payments, which is not beyond the reals of possibility, despite the harm it would bring on the ARG economy. Nevertheless the mention of some form of settlement is certainly positive and we all await the final outcome. I still wouldn't be surprised if the final outcome is something like $8bn (maybe a little more), in the form of a 10 year bond.

[purplepelmets] 27/12/2023 15:34

Should be easy enough to check voting records and any that voted for the Kirchners can pay a one off tax to cover liabilities. No point punishing those long suffering Argies that despised the champagne socialists.

[ali47fish] 27/12/2023 15:14

nobody is explaing why the share price is spiking-if the reason known and simply

[nfs] 27/12/2023 14:56

He does not have both or either