Argentina, lead creditors settle 14-year debt battle for $4.65 billion

Tue Mar 1, 2016 2:28am EST
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By Daniel Bases, Richard Lough and Sarah Marsh

NEW YORK/BUENOS AIRES (Reuters) - Argentina has agreed to a $4.65 billion cash payment to its main holdout creditors and will present the deal to Congress this week for a vote which would end 14 years of bitter legal battles and pave the way for its return to global credit markets.

Finance Minister Alfonso Prat-Gay said he hoped to issue two or three new sovereign bonds on international markets for a total of up to $15 billion in April if lawmakers were swift in backing the accord. The bonds would finance the payout to all holdout creditors who had reached an agreement, he said.

The vote will be a test of center-right President Mauricio Macri's ability to garner cross-party support for his reform package to revive the struggling economy.

"This is a giant step forward in this long-running litigation, but not the final step," mediator Daniel Pollack said.

The deal, agreed in principle late on Sunday, will see the four largest remaining holdout creditors get paid 75 percent of the amount outstanding on their judgments, including principal and interest, Pollack said.

Hedge fund Elliott Management, run by billionaire Paul Singer, brought numerous lawsuits against Argentina.

The legal saga involved years of court battles, street protests in Buenos Aires, the seizure of an Argentine naval vessel, and increasingly distorted economic policies as the government tried to avoid settling with the holdout creditors who blocked them raising capital on the international markets.

"He was a tough but fair negotiator," Pollack said of Singer.   Continued...

Argentina's Finance Minister Alfonso Prat-Gay (L) speaks next to Finance Secretary Luis Caputo during a news conference in Buenos Aires, Argentina, February 29, 2016.   REUTERS/Marcos Brindicci