Argentina wants deal with all holdout investors together

Wed Aug 27, 2014 3:02pm EDT
 
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By Alejandro Lifschitz

BUENOS AIRES (Reuters) - Argentina's government on Wednesday ruled out further piecemeal debt talks with a small group of U.S. hedge funds and said the country needed to strike a deal with all bondholders which have rejected past restructuring agreements as a single group.

Latin America's No. 3 economy fell into default again last month after failing to reach an agreement with a group of holdout funds led by NML Capital Ltd and Aurelius Capital Management, which are suing for full payment on their bonds.

Other funds which have also rejected bond swaps that followed the South American country's record default in 2002 lurk on the sidelines and could launch similar lawsuits.

"We have to negotiate with everyone," Economy Minister Axel Kicillof told a group of congressional committees on Wednesday.

A deal is now not seen likely before next year's October presidential election, in which Fernandez cannot run.

Analysts say the dearth of dollars flowing into the economy will stretch already-sapped foreign reserves and intensify pressure on a peso that is falling through one record low after another.

The local currency shed 1.5 percent on the black market on Wednesday to plumb an all-time low of 14.400 as central bank reserves fell to $28.5 billion.

Argentina's Congress began debating on Wednesday a draft bill designed to sidestep a U.S. court ruling banning Argentina from servicing performing debt until it pays the litigating funds $1.3 billion plus interest.   Continued...

 
Argentina's Economy Minister Axel Kicillof gestures as he speaks during a news conference in Buenos Aires August 20, 2014. REUTERS/Marcos Brindicci