Holdout bondholders say Argentina not at negotiating table
(Reuters) - Holdout investors in Argentine sovereign debt said on Monday they have not met with the government to negotiate a settlement on defaulted debt, and accused the government of refusing to enter talks.
"Argentina’s professed willingness to negotiate with its creditors has proven to be just another broken promise. NML is at the table, ready to talk, but Argentina has refused to negotiate any aspect of this dispute," said Jay Newman, senior portfolio manager at Elliott Management, which runs NML Capital Ltd, one of the lead holdouts in the case.
Argentina on Thursday deposited a regularly scheduled coupon payment due June 30 for restructured bonds without also making a court-ordered payment to holdout investors at the same time.
U.S. banking institutions are blocked from making the payments by U.S. District Judge Thomas Griesa in New York whose ruling in 2012 was upheld on appeal. He said on Friday the payment was illegal and that the money should "simply be returned to the Republic, simple as that."
If the payment is not delivered to holders of restructured bonds by the end of business on Monday, Argentina will be considered in technical default. It then has a grace period until July 30 in which to come to an agreement and settle the long-standing legal dispute. If no deal is reached Argentina will be in default for the second time in 12 years.
Griesa appointed Daniel Pollack, a veteran New York financial trial lawyer, as a special master to help facilitate a settlement between Argentina and the holdouts.
Argentina defaulted on roughly $100 billion in sovereign debt in 2001-2002 and negotiated a restructuring with eventually 93 percent of bondholders in a deal widely considered one of the most onerous for investors in history, paying between 25 and 29 cents on the dollar.
"There are no negotiations underway, there have been no negotiations, and Argentina refuses to commit to negotiations in the future. Argentina’s government has chosen to put the country on the brink of default. We sincerely hope it reconsiders this dead-end path," Newman said in a statement e-mailed to the media.
Argentina's economy ministry had no comment on Newman's statement.
On June 25 Economy Minister Axel Kicillof came to New York for 10-hour visit, speaking at a meeting of the G77 plus China Committee at the United Nations and said the country was being pushed into default but said he did not meet with holdout investors led by Elliott and Aurelius Capital Management.
On Friday Bank of New York confirmed that Argentina deposited $539 million into its account at the Central Bank of Argentina intended only for bondholders who participated in two sovereign debt exchanges in 2005 and 2010. In total the government transferred $832 million for payment to various bondholders.
In 2012 Griesa awarded the holdouts $1.33 billion plus accrued interest in a case based upon the pari passu, or equal treatment, clauses used to sell the bonds originally in 1994.