By Daniel Bases
NEW YORK Jan 24 Investors managing nearly $7 billion of restructured Argentine sovereign bonds say they are willing to negotiate an end to a decade-long fight by holdout investors who refused to participate in two prior government-led debt exchanges.
In a statement on Friday from the ad hoc group's legal adviser Linklaters, this group of so-called Exchange Bondholders says it now represents close to 30 percent of outstanding restructured debt managed by more than 20 asset managers.
"The Lead Committee is actively working with Deutsche Bank and is in the process of formalizing an engagement with Deutsche Bank for it to advise the Lead Committee in connection with the structuring of an inter-creditor transaction," the statement said.
In November, the ad hoc committee was formed in order to propose a resolution to end a standoff with holdout investors who did not want to take part in the restructurings stemming from the 2001 sovereign debt default, then the largest in history.
Linklaters was hired in December by the ad hoc group of asset managers that participated in the 2005 and 2010 exchanges.
Argentina has been ordered by a U.S. court to pay the holdouts $1.33 billion at the same time it pays Exchange Bondholders their principal and interest, something Buenos Aires said it would never do. Failure to make payments to both groups concurrently would result in a default on the already restructured debt.
Gramercy Funds Management is one of the lead members of the ad hoc group. It said in November that it wanted to come to a resolution and avoid a default by Argentina.
Holdout investors NML Capital Inc, a unit of Paul Singer's Elliott Management Corp, and Aurelius Capital Management have led the deep-pocketed legal fight against Argentina.
Spokesmen for both Elliott and Aurelius declined to comment on the Linklaters statement.
Sources familiar with both sides say there has been no formal contact between the committee and the holdouts.
One source said the ad hoc group has a steering committee of three firms, including Gramercy Funds Management and Fintech Advisory Inc, run by financier David Martinez. The name of the third firm was not immediately known.
Marty Flics, one of the lead partners on the matter for Linklaters, declined to comment on structure of the ad hoc group.
Creditors holding about 93 percent of the defaulted debt agreed to participate in the debt swaps in 2005 and 2010 that gave them between 25 cents and 29 cents on the dollar.