Argentina talks go long as debt deadline looms
NEW YORK (AP) — Argentina’s finance secretary and economy minister met with a court-appointed mediator as the South American nation worked into the night Tuesday to prevent its second default in 13 years.
Minister Axel Kicillof arrived Tuesday evening at the Manhattan offices of a mediator appointed to try to strike a deal by midnight Wednesday.
U.S. District Judge Thomas P. Griesa last week ordered around-the-clock negotiations to avoid a default, but no face-to-face talks between negotiators for Argentina and bondholders had occurred by the time Argentine officials arrived Tuesday morning.
Finance Secretary Pablo Lopez, treasury official Javier Pargament and two lawyers said nothing to reporters as they went in late morning to the midtown offices of the mediator, Daniel A. Pollack. Neither side provided information later about what occurred in talks that stretched late into the night.
Argentina has blamed the judge for the crisis, saying his orders are forcing it into insolvency.
The judge has ordered Argentina to pay about $1.5 billion it owes to New York hedge funds if it pays other bondholders who agreed to swap their bonds at a discount during the last decade.
The bond swaps accepted by about 92 percent of bondholders in the last decade came after Argentina went into default in 2001.
The judge has twice rejected Argentina’s request to suspend the effect of his orders to give the country more time to negotiate a settlement with all bondholders.
President Cristina Fernandez has long refused to negotiate with the U.S. hedge funds, led by New York billionaire Paul Singer’s NML Capital Ltd., which spent more than a decade litigating for payment in full rather than agreeing to provide Argentina with debt relief.
Argentina has labeled the U.S. funds “vultures” for picking up bonds on the cheap. The government has said paying the U.S. funds would likely trigger lawsuits from other bondholders demanding payment on similar terms. Argentina says that would cost more than $20 billion.
Late Tuesday, lawyers for a group of London-based bondholders who exchanged their bonds in the last decade said the financial firms that hold the bonds might be willing to drop a clause in their contracts that allows them to match deals reached with other bondholders.
The lawyers said the European bondholders in the past few days had been in touch with other interested bondholders who also would be willing to waive the clause, which expires at the end of this year.
The lawyers said the stance by the bondholders was a “clear signal that the republic may be able to obtain a waiver ... opening up a path to settlement.”
At a court hearing last week, attorney Jonathan Blackman told the judge that the clause was a “huge issue” that made a settlement by the end of the month impossible without some easement of his orders.