Argentine debt holdout urges talks, says deal still possible

Mon Jul 14, 2014 2:41pm EDT
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By Daniel Bases

NEW YORK (Reuters) - Aurelius Capital Management, one of the lead holdout creditors seeking to settle with Argentina over sovereign debt payments from its 2002 default, said on Monday the government faces a new crisis on July 30 unless it engages in serious negotiations.

Argentine officials and the holdout investors met separately with a court-appointed mediator on Friday, emerging from his offices after five hours of discussions with no resolution and no further talks scheduled.

Both sides have ramped up the rhetoric to explain why they are on one level eager to negotiate and on another at pains to show why the other side is not engaging.

"Absent a deal, Argentina’s next sovereign debt crisis will start on July 30. There is still time to avoid that outcome, but only if the Argentine government commences serious discussions with us immediately," Aurelius said in a statement.

The firm said that together with other holdout creditors, it has offered to meet with the government anytime, anywhere, but has been rebuffed.

"Argentine officials refuse to meet with us or even negotiate with us indirectly. Sadly, this approach gambles with the livelihoods and futures of the Argentine people."

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.

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.   Continued...

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