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Mediator: 2 of 6 Argentina bondholders agree to settlements


Created: 02/05/2016 4:25 PM

NEW YORK (AP) — Two of six leading bondholders that years ago refused Argentina's invitation to trade their bonds at steep discounts have agreed to settle their longstanding claims after the South American nation offered bondholders with cases in federal court in Manhattan $6.5 billion in what a court-appointed mediator described Friday as a "historic breakthrough."

Mediator Daniel Pollack said Argentina offered bondholders the deal to settle cases stemming from its 2001 default. Holdout bondholders were seeking about $10 billion.

Pollack said the agreement followed a week of negotiations between high-level Argentine government officials and senior principals of leading financial institution bondholders that were "intense but civil." He said he spoke Friday by telephone with President Mauricio Macri and Minister of the Economy Alfonso Prat-Gay.

"They both stand solidly behind this proposal," he said. "Both have shown courage and flexibility in stepping up to and dealing with this long-festering problem, which was not of their making."

He said Argentina's offer was breakthrough that could allow the republic to return to global financial markets to raise much needed capital. He said the offer must be approved by Argentina's Congress and is subject to a lifting of a Manhattan court order.

Lawyers for bondholders and Argentina have met several times since last month as Argentina seeks to end a long-running legal dispute that impedes its ability to help its struggling economy in global credit markets.

U.S. hedge funds are among bondholders that refused to trade bonds at discounted prices after Argentina defaulted on $100 billion in debt.

Among others, billionaire hedge fund investor Paul Singer's NML Capital Ltd. took Argentina to court and won judgments against it.

Lawyers for Argentina and the bondholders did not immediately return messages seeking comment Friday.

Pollack said all of the senior principals for bondholders worked diligently to resolve differences between their firms and Argentina, with two of the six leading bondholder groups signing agreements in principle with Argentina. He said negotiations will continue for the other four.

"It is my strong hope that, with continued negotiations, those firms, too, will be able to resolve their differences and reach agreements," Pollack said. "The events of this week and today were an important step in resolving Argentina's debt crisis; more remains to be done."

Pollack hasn't disclosed the names of the bondholders or details of their agreements.

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This story has been corrected to show the offer was $6.5 billion, not $6.5 million.

(Copyright 2016 by The Associated Press. All Rights Reserved.)


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