Argentina to send technocrats to debt talks

Thu Jul 10, 2014 11:08pm EDT
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By Walter Bianchi

BUENOS AIRES (Reuters) - Argentina said a team of technocrats, and not its economy minister, would attend a meeting in New York with a court-appointed mediator on Friday, as it seeks to resolve a dispute with holdout investors over its sovereign debt.

Argentina needs to seal a deal before a July 30 deadline with investors who rejected its debt restructurings after its catastrophic 2002 default on $100 billion. Growing optimism it will reach one sent its bonds higher on Thursday.

Without a deal, Latin America's No. 3 economy risks tumbling into a new default as it battles a recession, one of the world's highest inflation rates and dwindling foreign reserves.

"The mission that will meet with the special master Daniel Pollack in New York will be carried out by the juridical and financial team of the economy ministry and other areas of the government," Argentine Cabinet Chief Jorge Capitanich told reporters at his daily briefing.

He said Economy Minister Axel Kicillof will not participate.

U.S. District Judge Thomas Griesa has ruled Argentina must immediately pay the group of holdouts, led by hedge funds Elliott Management Corp and Aurelius Capital Management, the bonds' full value worth $1.33 billion plus accrued interest.

Griesa's ruling also ordered Argentina not to pay out to other investors who accepted large writedowns on their debt holdings until it had settled with the holdouts. More than 92 percent of investors agreed to receive less than 30 cents on the dollar in restructurings carried out in 2005 and 2010.

When Argentina in late June deposited a coupon payment worth about $539 million with the government's transfer agent, Bank of New York Mellon (BONY), Griesa blocked any onward transfer.   Continued...

Argentine stockbrokers work on the floor of the Buenos Aires Stock Exchange June 16, 2014.   REUTERS/Enrique Marcarian