Arseniy Yatsenyuk's "bark" in his Sunday sermon about debt restructuring was in vain. I'll have to release the sensational news ahead of time, waiting for the "judgment day" (and I mean "loan day") – September 23: the maturity date of $500 million in Eurobonds. Many have already realized that there is no real debt restructuring yet, and the laws voted in parliament change nothing. It's not us who should vote, but our creditors. But among them, there are already opponents of the deal with Ukraine – world-class experts in judicial abuse. The question is: is it the creditors who have "abused" Yaresko, or is she also involved?
To warm up, a little background information. Several days ago, media reports surfaced that holders of $500 million in Ukrainian Eurobonds maturing on September 23, 2015, were threatening to block the debt restructuring deal agreed upon by Ukraine and the creditors' committee. This was announced in a statement by the international law firm Shearman & Sterling LLP, which represents the interests of this group of creditors.
On Saturday, it was clarified that the hedge fund Aurelius Capital Management was "acting up," having already purchased a certain amount of Ukrainian Eurobonds during negotiations and formed a group of creditors that could seek improved debt restructuring terms.
"It's Aurelius. They've been accumulating bonds from the market," an anonymous source told Reuters. The hedge fund has been buying Ukrainian bonds, including those maturing in the final months of 2015. Earlier this year, the bonds hit a low of 35 cents on the dollar (when a default seemed likely), but are currently trading at 78 cents.
The report also stated that Aurelius, along with another hedge fund, Elliott, had been buying up the securities of defaulting Argentina and had been exerting legal pressure on Buenos Aires for a long time to fully repay its sovereign debt. The seizure of state assets was used as a means of pressure. In short, these guys are, to put it mildly, savvy.
Besides Argentina, they've been implicated in other high-profile financial scandals. For example, they profited handsomely from the lawsuit between the Los Angeles Times and Chicago's Tribune Publishing Co. They forced the investment company Dubai World to sell off $19,4 billion in assets to pay off debts. They bought up the debt of Citadel Broadcasting, a major radio corporation, and "dismembered" it to satisfy other creditors. They skillfully bankrupted and are now "eating away" at the assets of Energy Future Holdings Corporation, the largest electric utility in Texas. Clearly, these guys have a thing for Ukraine. And here, in fact, begins our (sometimes sensational) inside story.
So, who are Aurelius and Elliott? They're global debt collectors: brazen, devious, and unscrupulous. Both funds are under the same control. They are officially managed by two Jewish lawyer friends from New York: 62-year-old Mark Brodsky and 71-year-old Paul Singer.
Although Brodsky is formally in charge, Singer is the face of the companies. He loves appearing in the press and on talk shows, never misses a single session of the World Forum in Davos, and appears much more energetic than his younger partner. Apparently, he will be the one to sue Ukraine in international courts.
And here the logical question arises: how did these vultures get our bonds if they weren't involved in the creditors' committee or the negotiation process? All the "Yaresko duelists" (who, now that Brodsky and Singer are involved, will seem like "cute little things" to us) were named back in the spring.
This is BlackRock Inc., a White House protégé, the largest financial corporation in the United States, with assets of $4,57 trillion, personified by America's highest-paid woman, Barbara Novick, and her partners, Ben Golub and Larry Fink. Former US Treasury Secretary Lawrence Summers and current Secretary Jacob Lew are close to BlackRock. Janet Yellen, who currently heads the Federal Reserve, is also part of this circle. It was BlackRock Inc. that the Ukrainian side relied on, as it is, on the one hand, dependent on the administration and the will of the White House, and on the other, a shareholder in the Franklin Templeton fund, the official holder of $7,6 billion in our debt securities. This fact is worth remembering.
Other members of the Creditors' Committee are also well-known: T. Rowe Price, a veteran of the American investment business (the firm was founded in 1937). The corporation's president and CEO is James Aloysius Charles Kennedy, a scion of the famous presidential clan. TCW Group is owned by Mark Stern, a brilliant American lawyer, businessman, and philanthropist. It is said that he was the one who made Arnold Schwarzenegger the 38th Governor of California. And finally, André Santos Esteves, the controlling shareholder of the Brazilian investment bank BTG Pactual, which manages assets totaling approximately $200 billion.
As you can see, Aurelius Capital Management and its sister fund, Elliott, are not among this "crowd." How did they acquire Ukrainian debt securities? The answer is obvious: they bought them!
While Natalia Yaresko was "playing" erotic negotiating games with creditors, forcing them to make concessions either by force (a moratorium on payments) or by flattery (persuading them to help Ukraine), someone bought up a significant block of our debt securities – up to 25%.
In her latest broadcast of "Shuster Live" (which aired on 112 TV channel, not 1+1), Yulia Tymoshenko accused Russia's Alfa Bank and the Cabinet of Ministers' authorized representative for public debt management (former deputy at the Ministry of Finance), Vitaly Lisovenko, of buying up the debt. Lisovenko allegedly leaked information about the negotiations to Alfa Bank, where he worked until 2014, which then bought $1,5 billion worth of our bonds for resale. Alfa Bank denied the allegations and promised to sue for defamation.
But the fact remains: the debt was bought up and ended up in the hands of Brodsky and Singer. Who sold them the bonds would have been a matter of speculation for a long time, if not for one curious discovery.
This is one of the reports from BlackRock Inc. (let me remind you, a shareholder of the Franklin Templeton fund and an investment company close to the White House) for 2014.
On the second page, we see a photo of a young man named (as the caption suggests) Benjamin Brodsky. He is a managing director and global head of asset income distribution at BlackRock. A directory of prominent figures in the US stock market reveals that Mr. Brodsky combines this position with his position as managing director of income distribution at the Asset Advisors subsidiary of BlackRock (UK) Limited. He is also responsible for managing the investment segment of BlackRock. He has been with the company since April 25, 2003. At that time, lawyer and vulture Mark Brodsky was 49 years old.
Could 49-year-old lawyer Brodsky have had an adult son in 2003 who followed in his father's footsteps and joined a prominent investment firm? He could. Could Benjamin Brodsky be related to Mark Brodsky? Considering they work in the same field and the younger Ben has had a meteoric career, it's highly likely. Are they simply namesakes in New York, coincidentally matching the age of father and son? Isn't that too much of a coincidence?
Moreover, given the family connection between the two Brodskys, the story of the Ukrainian debt's transfer from the hands of custodian creditors to the hands of vultures becomes perfectly understandable. It's easy to imagine that during negotiations, when political pressure from the White House intensified on Franklin Templeton, and their parent company, BlackRock Inc., found it very difficult to refuse its patrons (and was eager to punish Yaresko for blackmail with a default), they "offloaded" some of their shares to collectors Aurelius and Elliott. Surely no one is preventing the sale of some of the debtor's assets during debt restructuring negotiations?!
Now BlackRock Inc. is washing its hands of the matter and reporting to Obama that the wish has been fulfilled, that they will sign a restructuring agreement with us. Meanwhile, a terrifying butcher, his hands stained to the elbows with the financial blood of Argentina and other victims of ruin, enters the courtroom and asks, "Where's Ukraine, which threatened us with a moratorium and default? Let's play, my dear?" And there are no appeals to the White House, no political defense. These vultures had everyone in mind.
Considering that the Brazilians are rumored to be joining them, and the Russians won't hesitate to chip in with their $3 billion, debt write-off threatens to turn into a lengthy and spectacle-filled process. I mean, a legal one.
The only question is whether Natalia Yaresko knew about what was happening behind the scenes of the negotiations (or rather, that the debts were being sold off), or whether the creditors deceived her, punishing her for pressuring them?
In topic: New Finance Minister Natalia Yaresko: Food for thought
Artem Bobrov, Versions
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