Argentina Says Willing to Negotiate With Holdouts Next Year
Argentina said it’s willing to begin negotiating next year to settle a legal dispute with holdout creditors from the 2001 default that drove the country into nonpayment of its debt in July.
Cabinet chief Jorge Capitanich said today that Argentina would negotiate in the first quarter of 2015 if a New York court grants a stay of execution on a ruling ordering the country to pay the litigants in full when it compensates holders of restructured bonds. Argentina defaulted for a second time in 13 years on July 30 after U.S. District Judge Thomas Griesa blocked an interest payment because Argentina refused to abide by the ruling.
“An application of a stay, that is a suspension of the ruling, is clearly necessary to establish conditions for negotiation from the first quarter of next year with all creditors that haven’t taken part in the exchange,” Capitanich said today in his daily news conference.
The statement marked the first time Argentina indicated it would negotiate once a Rights Upon Future Offers clause expires in rules governing restructured bonds, obliging Argentina to offer creditors that accepted 30 cents on the dollar in 2005 and 2010 the same terms as any improved offer. PresidentCristina Fernandez de Kirchner has argued that paying holdout creditors led by billionaire Paul Singer’s Elliott Management Corp. an estimated $1.6 billion would trigger further claims of as much as $120 billion.
Capitanich said in a statement sent today that the government’s position regarding the debt case hasn’t changed since Judge Griesa removed the stay.
“What Argentina has said publicly and emphatically is that it is disposed to dialog to establish negotiation conditions that involve 100 percent of bondholders in conditions that are equal, reasonable, legal, fair and sustainable,” Capitanich said, according to the statement.
Bond prices have held above their five-year average on speculation that Fernandez or her successor will eventually settle with the holdouts, paving the way for a re-entry into international debt markets.
Argentina’s bonds due in 2033 dropped 0.41 cent to 87.27 cents on dollar, with the yield falling six basis points, or 0.06 percentage point, to 10.29 percent.
To contact the reporters on this story: Charlie Devereux in Buenos Aires atcdevereux3@bloomberg.net; Pablo Gonzalez in Buenos Aires at pgonzalez49@bloomberg.net
To contact the editors responsible for this story: Brendan Walsh at bwalsh8@bloomberg.netDennis Fitzgerald, Rita Nazareth
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