Holdout bondholders say Argentina not at negotiating table

Mon Jun 30, 2014 7:23pm EDT
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By Daniel Bases

NEW YORK (Reuters) - Holdout investors in Argentine sovereign debt said on Monday they have not met with the government to negotiate a settlement on defaulted debt, and accused Buenos Aires of refusing to enter talks as a 30-day countdown to default begins.

Holdout investors are led by Elliott Management's NML Capital Ltd and Aurelius Capital Management, two hedge funds that specialize in buying up deeply discounted or distressed debt and negotiating profitable settlements, often through the use of the courts.

"Argentina’s professed willingness to negotiate with its creditors has proven to be just another broken promise. NML is at the table, ready to talk, but Argentina has refused to negotiate any aspect of this dispute," said Jay Newman, senior portfolio manager at Elliott Management.

"We sincerely hope it reconsiders this dead-end path," Newman said, noting there have been no negotiations so far and the government has refused to commit to negotiations in the future.

Argentina late on Monday said it would send a delegation to New York to meet on July 7 with court-appointed mediator Daniel Pollack. It made no mention of whether it would sit down with the holdouts.

"Argentina is reiterating its desire to negotiate according to just, equitable and legal conditions that take into account the interests of 100 percent of creditors," the economy ministry said in a statement.

In 2012, U.S. District Judge Thomas Griesa in New York awarded the holdouts $1.33 billion plus accrued interest in a case based upon the pari passu, or equal treatment, clause used to sell the bonds originally in 1994.

The award, which says Argentina must make payment to holdouts at the same time it pays investors who accepted two sovereign debt restructurings in 2005 and 2010, was upheld on appeal and denied a hearing by the U.S. Supreme Court, effectively exhausting Argentina's U.S. legal recourse.   Continued...

The facade of Argentina's Banco Central (Central Bank) is seen in Buenos Aires June 16, 2014. REUTERS/Enrique Marcarian