Um bônus do século XVII que ainda paga juros - Yale University

University Discovered 1648 Bond that Still Pays Interest – And they Collected!

Aug 24, 2019 Reginald Martyr

Collectible coins and banknotes

Experts at Yale University discovered a Dutch water bond from 1648 that amazingly still pays interest. At some point or another, people usually hear about some of the outrageous bond agreements to which persons have been subjected over the years. That said, hearing about a bond which was originally issued in the 17th century yet is still accruing interest 300 years later doesn’t happen often: in fact, some might argue that it’s impossible. Well, that’s not quite the case – it would seem that there isn’t just one, but a few bonds issued in the 1600s which have stood the test of time and are still very much relevant to the respective payers’ pockets.

YaleNews revealed that a water bond dating as far back as 1648 still contractually binds the obligated parties to pay annual interest today. Upon its discovery and subsequent analysis of its terms and agreements, reports indicate that at the time of its execution, the bond operated as a perpetual bond.

The original clauses of the agreement bound the payer to “5 percent interest in perpetuity,” a rate which was later lowered to 3.5 percent and then 2.5 percent respectively in the 1600s. At the time, physical notations of interest payments were inscribed on the bond as they were made as a means of recording them. Being of Dutch-origin and made out of goatskin, when the bond was issued, it was apparently made out to Mr. Niclaes de Meijer, a man who was ordered to pay the “sum of 1000 Carolus Guilders of 20 Stuivers a piece.”

This bond was issued in 1648 by a Dutch water board to finance improvements to a local dike system. A perpetual bond, it continues to pay interest. Photo courtesy of Yale News.

The manuscript was filed at Yale’s Beinecke Rare Book & Manuscript Library in 2003 after Yale managed to come into possession of it. After Timothy Young, the curator of Modern Books and Manuscripts at the library, conferred with a Dutch water authority named Stichtse Rijnlanden, not only did he discover that this bond was only one of five ever found, all five of them were administered by the Hoogheemraadschap Lekdijk Bovendams.

Beinecke rare book library at Yale. Photo by Michael Kastelic CC by SA-4.0

This entity was actually a water board which comprised a combination of highly-esteemed citizens and landowners. Apart from collecting the interest payments, the board oversaw a number of man-made constructions, including canals and dikes. Based on YaleNews’ report, the money collected served to compensate workers who had just completed a project in which they had to construct a formation of piers located close to a bend in one of the rivers. The project was supposed to help prevent erosion by assisting the river in properly regulating its flow.

In 2015, when Timothy Young returned from meeting with the relevant Dutch authority, he also brought back with him 12 years of back interest which was owed on the bond, a total which amounted to approximately 136.20 euros. Prior to 2015, the last time that the bond payments were collected was in 2003 when Yale first acquired it. At that time, as the reports states, “Geert Rouwenhorst, professor of corporate finance and deputy director of the International Center for Finance, took the bond back to the Netherlands to collect 26 years of back interest.”

Related Video: The modern day revival of the Knights Templar

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Rouwenhorst was quite surprised that such a bond hadn’t been deemed null and void yet, going on to say “Yale’s bond is an extremely early example of a security that was issued without maturity and still pays interest. One ought to be astounded that such a thing exists.”

That said, when the bond initially came into Yale’s possession, the Beinecke Rare Book & Manuscript Library did experience some difficulty in categorizing it considering that the bond was still very much valid.

According to Young, in order for the bond to remain valid, “we need to take it to the issuing authority in the Netherlands every couple of decades to collect the interest, but unless we’re loaning an item to another institution, we don’t allow collection material to leave the library.” For this reason, authorities were a bit divided as to how to best proceed with the filing of the document.

However, later on, something happened which enabled the relevant parties to come to an agreement. In 1944, the vellum no longer had any more space where the new interest payments could have been recorded. As a result, authorities elected to add a paper addendum which served to record future payments, a paper which they allowed to be sent to the Netherlands in order to retrieve and record the necessary payments.

At present, the bond is considered a bearer bond as anyone who shows the attached addendum to the authority in charge of issuing the payment is allowed to accept it.

Argentina perde nas cortes de New York: o fim da Doutrina Calvo?

Vejam primeiro esta pequena descrição da Doutrina Calvo na Wikipedia (um tema que venho seguindo desde muitos anos, mesmo não sendo jurista, apenas pelo interesse econômico do assunto):

Calvo Doctrine

From Wikipedia, the free encyclopedia

The Calvo Doctrine is a foreign policy doctrine which holds that jurisdiction in international investment disputes lies with the country in which the investment is located. The Calvo Doctrine thus proposed to prohibit diplomatic protection or (armed) intervention before local resources were exhausted. An investor, under this doctrine, has no recourse but to use the local courts, rather than those of their home country. As a policy prescription, the Calvo Doctrine is an expression of legal nationalism. The principle, named after Carlos Calvo, an Argentine jurist, has been applied throughout Latin America and other areas of the world.

The doctrine arose from Calvos's ideas, expressed in his Derecho internacional teórico y práctico de Europa y América (Paris, 1868; greatly expanded in subsequent editions, which were published in French). Calvo justified his doctrine as necessary to prevent the abuse of the jurisdiction of weak nations by more powerful nations. It has since been incorporated as a part of several Latin American constitutions, as well as many other treaties, statutes, and contracts. The doctrine is used chiefly in concession contracts, the clause attempting to give local courts final jurisdiction and to obviate any appeal to diplomatic intervention.

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Agora vejam esta matéria abaixo transcrita do New York Times deste sábado 24/08/2013. Para mim ela significa simplesmente o fim da doutrina Calvo, depois de 15o anos de vigência mal aceita pelos países credores.

Ao fim e ao cabo, a Argentina acabou perdendo em todas as frentes, inclusive no plano doutrinal, mas sobretudo no plano material, pois a aventura do calote vai continuar custando caro. O nosso Império, que sempre pagou pontualmente suas dívidas, e a República, que renegociou de boa fé diversas vezes, acabou sendo confirmada em sua atitude prudente.

Quero ver os argumentos dos companheiros, agora que a "ousadia" argentina recebeu uma resposta judicial. Vão dizer que os argentinos é que fizeram bem?

Paulo Roberto de Almeida 

HEDGE FUNDS | LEGAL/REGULATORY AUGUST 23, 2013, 9:05 PM 7 Comments

Hedge Funds Win Ruling in Argentina Bond Case

BY PETER EAVIS

Elena Craescu/European Pressphoto AgencyA Ghana court seized the Argentine vessel ARA Libertad in October on an injunction requested by Elliott Management.

A dogged group of hedge funds secured a significant victory in a federal appeals court on Friday in a case that is likely to have far-reaching effects on international bond markets, parts of the banking system and the struggling nation of Argentina.

The hedge funds, including one affiliated with the investment firm of the billionaire Paul E. Singer, bought a handful of bonds that Argentina’s government defaulted on early in the last decade. Their aim was to buy the debt for pennies on the dollar and then sue Argentina to press it to pay the bonds in full. A lower court judge ruled in their favor, and a three-judge panel of the United States Court of Appeals for the Second Circuit in New York upheld his decision.

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The funds may not be in line for a big financial return on their high-risk bet, even after the court victory on Friday. But even if their wager never pays off, the funds’ litigation strategy is bringing important changes to the international market in which many countries borrow to finance their deficits and support their economies.

The litigation could also create a situation in which Argentina, led by PresidentCristina Fernández de Kirchner, chooses to default on billions of dollars of bonds, a move that would deepen the country’s economic problems. Argentina has employed prominent New York lawyers to fight its case. Mrs. Kirchner has often commented combatively on the case, calling the hedge funds “vultures.”

“This is legal history in the making,” said Arturo C. Porzecanski, a professor of international economics at the American University in Washington. “The ruling, as well as the entire Argentina litigation, is really setting precedent.”

The appeals court decision has its roots in a dark period of Argentina’s recent history. Reeling from a harsh economic slowdown, Argentina defaulted on nearly $100 billion of debt in 2001. In the years afterward, many of the country’s bondholders agreed to deals in which they received new “exchange” bonds that were worth a lot less than the original ones. Argentina has kept up with the payments on the exchange bonds since it issued them.

But some investors, known as holdouts, refused to join the exchange deals and demanded full repayment. This included Mr. Singer’s firm, Elliott Management, which has sued other developing countries to make money on defaulted bonds. In the Argentina case, it even persuaded a court in Ghana to seize an Argentine naval vessel.

The funds demanded that they be paid in full on $1.3 billion of defaulted Argentine bonds, and Judge Thomas P. Griesa of Federal District Court in New York ruled forcefully in their favor.

His ruling contained two crucial features. First, he said Argentina had to pay the holdouts on their defaulted bonds whenever it next made payments on the restructured bonds. And in a move that has few precedents, Judge Griesa came up with a way to potentially enforce his decision if Argentina chose to ignore it. He singled out the financial firms that pass the payments on the restructured bonds from the Argentine government to their holders. If these firms handled the payments, they could effectively find themselves in contempt of the court’s ruling.

Not wanting to break the law, the firms, like Bank of New York Mellon, would stop processing the bond payments. Mrs. Kirchner would then have to decide whether to pay the holdouts to clear the way for the payment-processing firms to funnel money to the holders of the exchange bonds or, in the alternative, default on the exchange bonds.

Though the appeals court sided with Judge Griesa, it delayed the enforcement of the decision while the Supreme Court decides whether to take the case.

“Today’s unanimous, well-reasoned decision appropriately condemns Argentina’s persistent violation of its obligations and its extraordinary defiance of the laws of the United States,” Theodore B. Olson, a partner at Gibson, Dunn & Crutcher, the law firm that is representing an affiliate of Elliott Management, said in a statement.

“This is another opportunity for my government to do what it should do and deal in good faith,” said Horacio Vázquez, a Buenos Aires native who leads a group of bondholders who want to be repaid in full.

Elliott bought some of its Argentine debt before the country’s 2001 default, according to a person familar with the fund’s actions.

One big question is whether the appeals court decision will disrupt the sort of debt reductions that can ease the economic burdens of some countries. Investors might be emboldened to take a tough line after seeing Elliott’s legal successes.

But the appeals court argued that this Argentina case was narrow in nature, suggesting that it may not apply in other defaults. “This case is an exceptional one with little apparent bearing on transactions that can be expected in the future,” Judge Barrington D. Parker wrote in the decision.

Legal specialists who think the Argentina case won’t have a wide effect have also noted that many bonds now have a special feature that make it much harder for hedge funds to hold out.

Still, bonds continue to have a so-called pari passu clause, from the Latin for “on equal footing,” which has been crucial in this case. The clause provided the legal basis for the courts to demand that the holdouts be paid when the holders of the exchange bonds are paid.

“Everyone who has a clause like this had better look at it very carefully,” Mitu Gulati, a law professor at Duke, said.

Perhaps the most jarring development is that the appeals court upheld the provisions that are designed to stop banks from passing on payments on the exchange bonds. The government debt market lacks an authority, like a bankruptcy court, that can sort out disputes between creditors and debtors. By effectively tying the hands of firms like Bank of New York Mellon, the United States courts could become such an enforcer.

“This is the revolution in this case,” Mr. Gulati said. “For the first time in hundreds of years of sovereign debt, a court is saying, ‘We’re going to go out there and improve the market by helping you to enforce it.’ ”

The odds of Argentina getting the Supreme Court to rule on the case do not look strong.

“On the one hand, just looking at these questions as questions of law, I don’t think the Supreme Court is likely to take it up,” Henry Weisburg, a partner at Shearman & Sterling, said. “But you do have to balance this against the fact that sovereign states do get deference from the Supreme Court.”

In Argentina, Mrs. Kirchner is likely to keep up her strong opposition to the hedge funds for the foreseeable future, which means they probably won’t get paid in full any time soon.

But political analysts are starting to doubt whether she can win the 2015 election. That could pave the way for a new president who may be more willing to settle with the holdouts.

Jonathan Gilbert contributed reporting from Buenos Aires.

A version of this article appears in print on 08/24/2013, on page B1 of the NewYork edition with the headline: Hedge Funds Win Ruling In Argentina Bond Case .