February 4, 2016 / 1:40 AM / in 2 years

Argentina debt talks make progress, to continue: mediator

U.S.-court appointed mediator Daniel Pollack arrives, at his midtown Manhattan office for a meeting on Argentina's debt crisis, in New York February 1, 2016. REUTERS/Brendan McDermid

NEW YORK (Reuters) - Sovereign debt settlement talks between the government of Argentina and holdout bondholders stemming from an historic default in 2002 made further progress on Wednesday, the court appointed mediator, Daniel Pollack, said in a statement.

“Some progress was made today. Discussions will continue tomorrow,” Pollack said. Thursday’s discussions between Argentine Finance Secretary Luis Caputo and various holdout investors would mark the fourth straight day of meetings between the two sides in the dispute.

In the U.S. courts there are $9 billion worth of claims against Argentina that remain to be settled, Pollack said in a statement at the start of this round of talks on Monday.

Caputo, a former bond trader with Deutsche Bank, sits at the negotiating table with a market mindset that is different from the previous government’s chief negotiator, former Economy Minister Axel Kicillof, an economist and academic.

One source familiar with the discussions in New York said the talks could extend potentially through to Friday.

A second source familiar with the talks characterized the discussions as “intense and highly complex” given different investor groups are now involved rather than just the main holdouts led by Elliott Management and Aurelius Capital Management.

In November 2014, Pollack was given authority by presiding U.S. District Judge Thomas Griesa to grant other holdout investors a seat at the negotiating table.

Argentina appears to be working systematically to settle with those various holdout groups.

On Tuesday, Finance Minister Alfonso Prat-Gay, an ex-banker with JPMorgan Chase & Co, announced a settlement with Italian creditors who hold unpaid sovereign debt. Argentina will pay them $1.35 billion in cash. That represents a payment of 150 percent on the $900 million principal value of the defaulted bonds.

Any deal the administration of newly elected President Mauricio Macri reaches with holdout bondholders is subject to approval in Argentina’s congress where Macri does not hold a majority.

While in New York Caputo has said on several occasions that he sees progress and has met with several different holdout investors. Press reports on Wednesday indicate he reiterated that talks remain informal and in confidence.

However, it is still unclear whether or not Argentina has signed a non-disclosure agreement (NDA) that Elliott and Aurelius demanded. The government has insisted that they have to operate with open and transparent discussions.

The second source familiar with the negotiations says the government has not signed the NDA.

Reporting By Daniel Bases; Editing by Andrew Hay

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