Argentina Reaches $4.65 Billion Debt Deal With Main Holdouts

By Charlie Devereux

(Bloomberg) --

Argentina and a group of holdout creditors have agreed in principal to bring an end to a 15-year legal dispute over defaulted debt.

Argentina will pay a group of litigants led by Paul Singer’s Elliott Management $4.65 billion, or about 75 percent of their full judgments including principal and interest, according to a statement by Daniel Pollack, the court-appointed mediator. The funds, which also include Aurelius Capital Management, Davidson Kempner and Bracebridge Capital, will also receive a payment to settle claims outside New York District court and for certain legal fees and expenses incurred during the dispute.

The deal is subject to Argentine Congressional approval and the repealing of several debt laws. It may take about six weeks to close a deal and holdout funds have agreed not to interfere in Argentina’s expected raising of capital to pay for the settlements. Argentina has now resolved about 85 percent of claims.

“This is a giant step forward in this long-running litigation, but not the final step,” Pollack said.

To contact the reporter on this story:
Charlie Devereux in Buenos Aires at cdevereux3@bloomberg.net