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Argentina likely to miss interest payment to creditors, possibly default

Argentina likely to miss payment

Argentina was likely to miss a bond payment Monday, setting it on a course for a possible catastrophic default.

Argentina owes an interest payment to the majority of its creditors, but the government has a 30-day grace period to avoid going into its second default in 13 years.

The U.S. Supreme Court recently turned down Argentina’s attempt to block a lower court ruling that it must pay hedge funds that own bonds left over from its record $100 billion default in 2001.

U.S. District Judge Thomas Griesa urged Argentina on Friday to continue negotiating with the funds that refused to participate in debt swaps in 2005 and 2010. The judge also said it would be illegal for Argentina to make a payment to the majority of its bondholders without also paying more than $1.5 billion to the holdouts.

Griesa appointed a special master last week to facilitate talks because Argentina indicated through its lawyers that it planned to negotiate for the first time with the U.S. bondholders, led by New York billionaire Paul Singer’s NML Capital.

The holdout creditors accused Argentina on Monday of refusing to begin talks.

“There are no negotiations underway, there have been no negotiations, and Argentina refuses to commit to negotiations in the future,” Elliott Management, which runs NML, said in a statement. “Argentina’s government has chosen to put the country on the brink of default. We sincerely hope it reconsiders this dead-end path.”

Later Monday, Argentina’s economy ministry issued a statement saying it would send a delegation to New York to meet with the debt negotiation mediator on July 7.

— Associated Press

Cosmetics makerto settle complaints

Cosmetics maker L’Oreal USA has agreed to settle U.S. complaints that its advertisements for skin care products Lancome Génifique and L’Oreal Paris Youth Code were deceptive, the Federal Trade Commission said Monday.

Under the settlement, L’Oreal USA, a subsidiary of L’Oreal, is barred from making claims about the products that have not been substantiated by scientific proof, the FTC said.

In its complaint, the U.S. agency said L’Oreal claimed the ­Génifique line of products would cause “visibly younger skin in just 7 days” by prompting genes to “stimulate the production of youth proteins.” The ads for the Génifique products, which cost between $60 and $132, ran from about February 2009 to April 2013.

L’Oreal advertised the Youth Code products by saying they would “instantly improve skin quality while revealing the new youth of your skin,” the FTC said in its complaint. These products start at about $15.

The FTC alleged that L’Oreal had no studies to back up its assertions.

“It would be nice if cosmetics could alter our genes and turn back time,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection. “But L’Oreal couldn’t support these claims.”

L’Oreal said in its response that the claims that concerned the FTC had not been used “for some time now.” L’Oreal USA spokeswoman Kristina Schake said in a statement that “the safety, quality and effectiveness of the company’s products were never in question.”

— Reuters


— From news services




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