NEW YORK, Feb 19 (Reuters Breakingviews) - Argentina has reached the endgame in its battle with holdout bondholders. U.S. District Judge Thomas Griesa ruled on Friday that he would allow the Latin American nation to resume paying creditors as soon as next month if its Congress cooperates. He also praised President Mauricio Macri for helping cut a deal. A quick settlement looks like the only option left for hedge fund Elliott Management and its fellow holdouts.

YESTERDAY'S HEADLINES FEB 19, 2016  7:37PM

BREAKINGVIEWS-Argentina reaches endgame with bond adversaries

 (The author is a Reuters Breakingviews columnist. The opinions
expressed are his own.) (Refiles to add links to context news.)
    By Reynolds Holding
    NEW YORK, Feb 19 (Reuters Breakingviews) - Argentina has
reached the endgame in its battle with holdout bondholders. U.S.
District Judge Thomas Griesa ruled on Friday that he would allow
the Latin American nation to resume paying creditors as soon as
next month if its Congress cooperates. He also praised President
Mauricio Macri for helping cut a deal. A quick settlement looks
like the only option left for hedge fund Elliott Management and
its fellow holdouts.
    The wrangling over payment has raged since Argentina's 2001
default on some $100 billion of debt. About 95 percent of
creditors swapped their bonds in 2005 and 2010 for some 30 cents
on the dollar or less. An Elliott affiliate refused, persuading
Judge Griesa to block the country from paying any other
creditors before the hedge fund and other recalcitrant
investors.
    A breakthrough came about two weeks ago, when Argentina's
government asked owners of roughly $9 billion in defaulted bonds
to accept a 25 percent discount. Two creditors agreed but
Elliott chose to keep haggling.
    That may not be possible for much longer. Griesa ruled that
he would be willing to lift his blocking order under three
conditions. First, the nation's Congress would have to repeal
laws barring any compromise with the holdouts. Second, Argentina
would have to pay investors that accepted its offer by Feb. 29.
And third, a fairly minor legal technicality involving the
judge's jurisdiction over the case would have to be resolved.
    The first condition may be the biggest hurdle. Macri's
Peronist predecessor, fiery leftist Cristina Fernandez, refused
to talk with the holdouts, belittling them as "vultures," and
the left-leaning legislature still needs convincing. But recent
defections of a dozen members of Congress away from Fernandez's
brand of Peronism may help Macri gain approval for the deal. And
once that happens, the other conditions should be satisfied
quickly. 
    That would leave Elliott with little leverage, and there
will almost certainly never be a better time to cash in on its
bonds. More importantly, for Argentina, a settlement means that
a functional economy and access to global markets may finally be
within reach.

     CONTEXT NEWS
    - U.S. District Judge Thomas Griesa said on Feb. 19 that he
would lift orders that restrict Argentina from servicing its
restructured debts. 
    - The injunction could be vacated on the conditions that the
Latin American country repeal legal obstacles to paying its debt
to the holdout bondholders and that it makes full payment to
those investors that accept the settlement offer by Feb. 29. 
    - The ruling was issued at Argentina's request, though
Griesa lacks jurisdiction because of a pending appeal. 
    - Griesa's ruling: http://bit.ly/1Qr17iZ
    - Reuters: U.S. judge says might lift Argentina debt
injunctions if permitted 


    - For previous columns by the author, Reuters customers can
click on 
 

    
 (On Twitter https://twitter.com/holdingren Editing by John
Foley and Kate Duguid)
 ((reynolds.holding@thomsonreuters.com; Reuters Messaging:
reynolds.holding.thomsonreuters.com@reuters.net))

Keywords: ARGENTINA DEBT/BREAKINGVIEWS