Argentina cannot turn its back on negotiations with holdout creditors after defaulting on its sovereign debt, a U.S. judge instructed Friday, just as the country’s failure to service a June interest payment was declared a “credit event.”
In a stern tone, U.S. District Judge Thomas Griesa in New York slammed the decision by Latin America’s third-biggest economy to defy his order that it pay in full holdout investors suing it and instead default on $29 billion in debt.
As Griesa was speaking, a 15-member committee aided by the International Swaps and Derivatives Association voted unanimously to call the missed coupon payment a “credit event.” The move triggers a payout process for holders of insurance on Argentine debt, which analysts estimate could amount to about $1 billion.
“Nothing that has happened this week has removed the necessity of working out a settlement,” said Griesa, telling both sides to continue working with mediator Daniel Pollack.
The judge chided Argentina for making public statements that he characterized as misleading. “The debts weren’t extinguished. There’s no bankruptcy, no insolvency proceedings,” Griesa said. “The debts are still there.”
The judge has been at the center of Argentina’s drawn-out fight against the New York hedge funds suing it for full payment on bonds they bought on the cheap after the country’s record 2002 default on $100 billion in debt.
Big discounts helped U.S. auto sales sizzle in July. Toyota, Ford, Nissan and Chrysler all saw double-digit sales gains. General Motors’s sales were up 9 percent compared with last July, while Hyundai’s rose 1.5 percent. Of major automakers, only Honda and Volkswagen saw declines.
Last month was the best July for the industry since 2006. New vehicle sales rose 9 percent to 1.4 million, according to Autodata.
Automakers typically offer deals in the summer to clear out inventory before cars from the new model year arrive in the fall. But last month’s discounts were unusually high.
Incentives rose 8 percent — or $216 per vehicle — over last July, said Jesse Toprak, chief analyst for the car shopping site Cars.com. Incentives averaged $2,774 per vehicle, their highest level since August 2010. Toprak said Ford, Toyota, Volkswagen and Hyundai were the most generous; GM and Honda spent less.
Toyota was offering zero-
percent financing on a five-year loan and $1,000 cash back on the Camry sedan. Ford offered $6,000 cash back on a new Expedition SUV. And Chrysler was peddling a $99 per month, two-year lease on a Dodge Dart. Edmunds.com said 13.5 percent of new car loans in July had zero-percent financing, the highest level since December 2010.
— Associated Press
● The General Motors Web site, set up to give consumers quick information on recalled cars, has been providing inaccurate information, the Transportation Department said. When consumers entered their vehicle identification numbers to determine whether their automobiles were subject to recall, some were erroneously told no, according to a statement issued by the National Highway Traffic Safety Administration. NHTSA told consumers to check the GM Web site after Friday evening for accurate information.
● Procter & Gamble plans to sell, discontinue or eliminate as many as 100 brands in the next two years to cut costs and focus on its most important product lines. The 70 to 80 brands that will remain at the world’s largest consumer-products company have accounted for 90 percent of P&G’s sales and more than 95 percent of its profit in the past three years, chief executive A.G. Lafley said. Earlier this year, Lafley agreed to sell most of P&G’s pet-food operations, including Iams and Eukanuba, for $2.9 billion. The company’s top brands include Tide detergent, Pampers diapers, Crest toothpaste and Gillette razors.
● Warren Buffett’s Berkshire Hathaway said second-quarter profit soared 41 percent to a record high, reflecting substantial investment gains and improved results in manufacturing, service and retail businesses. Berkshire said its overall net income grew to $6.4 billion, or $3,889 per Class A share. That is up from $4.54 billion, or $2,763 per Class A share, in the same quarter a year ago. Berkshire’s revenue improved 11 percent to $49.76 billion from last year’s $44.69 billion.
● Apple won preliminary court approval for its $450 million settlement of claims that it harmed consumers by conspiring with five publishers to raise e-book prices. In approving the accord, U.S. District Judge Denise Cote in Manhattan overcame concerns she had expressed over a settlement provision allowing Apple to pay only $70 million if related litigation were to drag out. Apple has been appealing Cote’s July 2013 finding, in a case brought by the Justice Department, that it violated antitrust laws for colluding with the publishers to drive up e-book prices and impede rivals such as Amazon.com.
● Moody’s ratings agency has upgraded Greece’s government bond rating, predicting a gradual decline of the national debt. The agency said it had raised the Greek rating by two notches from Caa3 to Caa1 — still below investment grade. Greece is set to emerge from recession this year for the first time since 2008. The country was rescued from the brink of bankruptcy in 2010 by an international bailout that was eventually worth $308 billion.
— From news services