NTINA’S government yesterday asked a US judge to unfreeze payment to holders of the country’s restructured debt, in return for opening talks with holdout investors suing for full repayment.
A number of holdout creditors – namely hedge funds led by Elliott Management Corporation – refused to restructure their bonds in the wake of the Latin American country’s 2002 debt crisis and are demanding the full $1.33bn (£770m) plus accrued interest.
Over 92 per cent of Argentina’s creditors agreed to receive less than 30 cents on the dollar in bond restructurings carried out in 2005 and 2010. Argentina tried to repay some of this restructured debt, but a US judge blocked the payment, saying the government must settle with the holdouts first.
The holdouts want 100 cents on the dollar, although they have made hints they are willing to negotiate.
The government is sending a team to New York next week to pave the way for talks.
“These conditions will naturally include our objective of respecting the restructuring of 92.4 per cent of our debt and generating fair conditions for all creditors,” cabinet chief Jorge Capitanich told a news conference. “We are going into the meeting with this objective.”
Argentina has until the end of the month to settle a deal with the holdouts.
If it fails, it may fall into its second debt crisis in 12 years.