BUENOS AIRES/NEW YORK: Argentina was in a race against time yesterday to cut a deal by the end of the day with holdout investors suing it or win a reprieve from a US court, as a surge in the country’s bond prices fed optimism that an agreement was possible.
Attorneys for holdout hedge funds awarded $1.33bn plus interest by a US court arrived for talks at the New York offices of court-appointed mediator Daniel Pollack yesterday morning, with hours to go Argentina faces its second default in 12 years.
Argentine Economy Minister Axel Kicillof arrived for the talks. The holdout funds are demanding demand full repayment on bonds they bought at a discounted rate after the country last defaulted in 2002.
The price of the South American country’s bonds surged 15 percent to levels not seen in 3 and a half year, a sign to some investors that a deal was attainable before another damaging default. “It’s trading like there’s a deal,” said a fund manager who holds Argentina’s restructured debt and requested anonymity. “I don’t have information, but someone knows there’s a deal.”
Latin America’s No. 3 economy has for years fought NML Capital, a unit of Elliott Management Corp, and Aurelius Capital Management, the leading US hedge funds that rejected large writedowns. After exhausting legal avenues, it faces default if it cannot reach a last-minute deal.
The Buenos Aires government has pushed hard for a stay of the US court ruling that triggered the deadline. The government has until midnight today (0400 GMT on Thursday) to break the deadlock. If it fails, US District Judge Thomas Griesa in New York will prevent Argentina from making a July 30 deadline for a coupon payment on exchanged bonds.
REUTERS
