Argentina on Monday signed a preliminary deal to repay four hedge funds $4.7 billion on bonds from a $100 billion default, inching closer to global financial markets borrowing for the first time in 15 years. I will continue to serve, at the pleasure of Judge Griesa, until all claims are resolved, both with respect to the consummation of this central Agreement in Principle and to facilitate settlement with all other “holdout” Bondholders who wish to resolve their claims with Argentina.
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It’s the latest in a string of deals to settle the remaining roughly $10 billion bonds from a 2001 default, a dispute that some creditors took to the USA courts.
“I am very biased, but I really do believe that after settling with holdouts, Argentina’s financing costs should fall substantially”, said Lifsic, who worked as an investment fund manager and president of the country’s largest mortgage bank before being named investment promotions secretary at the Telecommunications Ministry in December.
The agreement will pay Elliott Management, Aurelius Capital, Davidson Kempner and Bracebridge Capital “75% of their full judgments including principal and interest, plus a payment to settle claims outside the Southern District of NY and certain legal fees and expenses incurred by them over a 15-year period”, the statement said.
In a statement Monday, Feb. 29, 2016, Daniel A. Pollack, appointed arbiter in the negotiations between the Argentine government and USA holdout creditors, said that a deal has been reached that will put an end to a standoff that has kept the South American country on the margins of worldwide credit markets.
The deals follows Argentina an earlier agreement to pay nearly $2 billion to other holdouts, as well as another $1.34 billion to 50,000 Italian bondholders.
The “holdout funds” successfully sued Argentina’s government in a NY court arguing that their debts deserved equal consideration with those of other creditors. Fernandez’s husband and predecessor Nestor Kirchner took power in 2003 and negotiated a restructuring two years later that officials have called the harshest ever for sovereign-debt investors.
Is an end finally in sight in Argentina’s battle with its creditors? Argentina wants a deal so it can raise new capital from foreign bond offerings to help stimulate its depressed economy.
The government – struggling to escape the stigma of a “Caa1” deep junk credit rating from Moody’s – says it plans to issue new debt to clear out the old debt.
Argentina’s President Mauricio Macri during an interview with AFP at the Casa Rosada presidentia … Upon payment, the Injunctions entered several years ago against Argentina by Judge Thomas P. Griesa would automatically dissolve if Judge Griesa’s Indicative Ruling of February 19 is converted into a final Order vacating the Injunctions.
The settlement will resolve 85 per cent of the claims of the holdouts, Pollack said.
But before completing the repayment, Macri’s administration must get two laws repealed in the opposition-controlled Congress.
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“He was a tough but fair negotiator”, Pollack said of Singer.
