(Adds country risk, analyst quotes)
BUENOS AIRES, June 18 Argentine stocks and
over-the-counter bonds rose on Wednesday, reversing losses after
a lawyer representing the South American country in its bond
dispute said it would negotiate for the first time with holdout
investors next week.
Argentina's country risk, as measured by the J.P. Morgan
EMBI+ Index eased 53 basis points on hopes negotiations could
end its long battle with the investors who refused to agree to
its restructuring and help it avoid a new default.
The Merval stock index closed up 2.9 percent, while
2038 Par bonds closed up 7.2 percent.
Stocks and bonds had nosedived earlier in the session on
news a U.S. court was lifting its stay on an order requiring
Argentina to pay $1.33 to the hedge funds.
Argentina has vowed not to pay the holdouts but if it fails
to do so or negotiate another solution, a U.S. court could bar
it from servicing debt that it restructured in 2005 and 2010.
A lawyer for the country said at a New York court hearing on
Wednesday Argentine officials had expressed a willingness to
negotiate with holdouts to resolve the situation.
"This signal is crucial for trying to advance towards a
negotiation and service the discount bond at the end of the
month," said Gustavo Ber, an analyst with consultancy Estudio
Ber. "In the opposite case, authorities would have to quickly
implement a local swap."
Economy Minister Axel Kicillof had said on Tuesday the
country was considering moving its restructured debt under U.S.
legislation to local law so it could continue making payments
without paying holdouts.
Some analysts said his comments seemed designed mainly to
strengthen Argentina's negotiating position.
(Reporting by Jorge Otaola; Writing by Sarah Marsh; Editing by
James Dalgleish and David Gregorio)