Report: Argentine Bond Deal Near

Aug 7 2014 | 4:17pm ET

A deal to end the Argentina default impasse may finally be at hand, as a group of international banks may be poised to buy out hedge-fund holdouts from the country’s 2001 default.

IFR reports that the hedge funds, led by Elliott Management and Aurelius Capital Management, could reach an agreement with a group of banks by next week. Such a deal would allow Argentina to make the $539 million bond payment it missed last week, leading to its second default in 13 years.

While sources expressed confidence that a pact could be finalized, no price has yet been agreed. IFR noted that the dispute has been near a resolution several times since the Wednesday default, but without an actual deal.

Unlike those previous talks, held primarily with Argentine banks, major international banks—notably Citigroup, HSBC and JPMorgan Chase—are leading the negotiations now.

As those discussions continue, Argentina is again lashing out at the U.S. government—albeit with something of a lack of understanding about separation of powers in the country.

Economy Minister Axel Kicillof, who insists that Argentina has not defaulted, said yesterday that President Barack Obama should “put limits” on the federal judge whose order to pay the holdouts led to the default.

“The United States can play dumb, but Judge Griesa decided to seize something that isn’t even ours. It belongs to the bondholders,” Kicillof said. “Why doesn’t the United States government put limits on a judge? This seems like a joke.”

Griesa’s ruling has been affirmed by the U.S. Second Circuit Court of Appeals and the U.S. Supreme Court, which allowed it to stand by refusing to accept Argentina’s appeal.


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