Argentina Talks To Resume On Eve Of Default

Jul 28 2014 | 12:24pm ET

Argentina will make a final stab at avoiding a default on Wednesday with a last-ditch meeting with a court-appointed mediator tomorrow.

The country has until July 30 to pay hedge-fund holdouts from its last default years ago or to win a stay of the court-order requiring that payment. Its negotiators left New York on Friday without a deal, rather than negotiating “continuously” over the weekend and today, as U.S. District Judge Thomas Griesa, who is presiding over the case, has urged.

Aregentina’s representatives “left New York City on Friday evening to consult with their government in Buenos Aires,” the mediator, Daniel Pollack, said.

Griesa’s rulings bar Argentina from paying its restructured debt without also paying the holdouts—led by Elliott Management and Aurelius Capital Management—$1.5 billion. Argentina has said that doing so will open it up to more than $100 billion in claims from holders of that exchanged debt, who accepted roughly 30 cents on the dollar.

Argentina has refused to meet with the hedge funds face-to-face, and have said that a stay is necessary to negotiate a global settlement including all creditors. Griesa has twice this month rejected the country’s request for more time. Today, Cabinet Chief Jorge Capitanich insisted once again that “all negotiations related to an extremely complex issue like this one takes time.”

Elliott and Aurelius have shot back that Argentina has wasted years without talking to them and has shown no sign that it is interested in doing so. The two have said that a deal could be reached quickly if Argentina engaged in face-to-face negotiations.

The delegation to tomorrow’s meeting will include Finance Secretary Pablo Lopez, Capitanich said.

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