Argentina to Resume Debt Talks With Holdout Creditors Next Week

  • Caputo, Pollack and creditors to meet Wednesday in New York
  • Argentina seeking second law firm to help with negotiations

Argentina will restart negotiations with disgruntled creditors headed by Elliott Management on Wednesday in New York, a month after President Mauricio Macri took office, with court-appointed debt mediator Daniel Pollack overseeing the talks.

Argentine Finance Secretary Luis Caputo will travel to New York on Monday, a Finance Ministry press official told reporters in Buenos Aires.

The last time an Argentine government official sat down with the holdout creditors was in July 2014 when former Economy Minister Axel Kicillof failed to reach a deal, triggering the nation’s second default in 13 years. U.S. District Judge Thomas Griesa is blocking payments on about $30 billion of Argentina’s restructured debt until a settlement is reached with holdouts. Caputo, a former Deutsche Bank AG and JPMorgan Chase & Co. banker, has met with Pollack at his office in New York twice since Macri won the Nov. 22 runoff election.

Caputo was in New York last week meeting with attorneys as Argentina plans to hire an additional law firm to work with Cleary Gottlieb Steen & Hamilton LLP, the official said. 
Candidates include Davis Polk & Wardwell LLP, Shearman & Sterling LLPSkadden Arps Slate Meagher & Flom LLP, Sullivan & Cromwell LLP and Wachtell Lipton Rosen & Katz, Finance Ministry spokeswoman Yael Bialostozky said on Dec. 29.

Argentina’s restructured bonds due 2033, which are in default, trade at 114.49 cents on the dollar including accrued interest. Speculation Macri would resolve the conflict pushed the price up from 105 cents before the first-round election in October.

Macri has said he plans tough negotiations that will protect national interests. A settlement would allow Argentina to get foreign financing at lower interest rates and could lead to upgrades from credit agencies and greater weighting in bond indexes to attract more investors.

The country’s defaulted debt is a hangover from from the 2001 economic crisis. After defaulting on a record $95 billion of debt at the beginning of the century, Argentina restructured about 93 percent of the arrears by giving creditors about 30 cents on the dollar. Argentina’s previous administrations have refused to offer the holdout bondholders better terms, which has kept South America’s second-largest economy isolated from global credit markets.

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