Argentina says it has no team for talks in debt battle

Thu Jun 19, 2014 5:20pm EDT
 
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By Alexandra Ulmer and Jorge Otaola

BUENOS AIRES/NEW YORK (Reuters) - Argentina hasn't prepared a team to go to New York to negotiate with holdout bondholders, Cabinet chief Jorge Capitanich said on Thursday, casting doubt over whether it will seek a deal to stave off a debt default.

His remark appeared to contradict the government's lawyer, Carmine Boccuzzi of Cleary Gottlieb Steen & Hamilton, who said in federal court on Wednesday that Argentina would send officials to New York next week to seek negotiations with holdouts for the first time.

"There is no delegation prepared for a possible trip to the United States," Capitanich said in his morning briefing, although he also did not rule out negotiations.

A government source said later that Capitanich was referring to a lack of detail about who would travel and when, but that he wasn't saying talks wouldn't take place.

Argentina on Wednesday also said it couldn't afford to make its next bond payment, due June 30, if it had to pay the holdouts as well as the owners of its restructured bonds. Uncertainty about the government's strategy pushed Argentine stocks down about 3.5 percent in Thursday trading.

The 2nd U.S. Circuit Court of Appeals ruled on Wednesday that Argentina can't continue to pay creditors who agreed to restructure their bonds after its 2001-02 default on $100 billion in debt unless it also pays $1.33 billion to the holdouts demanding full payment.

President Cristina Fernandez's leftist government has until now refused to pay the holdouts and says the court rulings make it impossible to meet the next payment to holders of restructured debt.

Capitanich also referred to Economy Minister Axel Kicillof's remarks this week that Argentina was exploring ways to pay holders of its restructured bonds outside of U.S. law, an issue that was discussed yesterday in a hearing before U.S. District Judge Thomas Griesa in Manhattan.   Continued...

 
The Economy Ministry building is seen in Buenos Aires June 18, 2014.  REUTERS/Enrique Marcarian