| NEW YORK, July 8
NEW YORK, July 8 Investors holding over $6
billion worth of unrestructured Argentine sovereign debt are
starting the process of organizing negotiating committees,
encouraged by Buenos Aires' stated desire to settle with 100
percent of all of its creditors.
These are Argentina's "other" holdouts, the ones it fears
will bring lawsuits and open it to liabilities in the
government's estimation close to $15 billion.
Currently, Argentina is negotiating through a U.S.
court-appointed mediator with holdout investors led by Elliott
Management Corp and Aurelius Capital Management.
While Elliott and Aurelius are the most famous among the
holdouts, a whole class of investors who did not participate in
restructurings, either by choice or because they did not have
resources to fight a sovereign nation, have bided their time.
"This has a lot of the me-too, piggy-back, type investors
lining up," said a source who is familiar with the four
different groups of holdout investors and who spoke on condition
of anonymity given the non-public nature of the information.
The government has until July 30 to come to an agreement or
face default for the second time in 12 years. It defaulted on
approximately $100 billion of debt in 2002.
U.S. District Judge Thomas Griesa in New York ordered
Argentina to pay the Elliott/Aurelius group $1.33 billion, plus
accrued interest at the same time it made a regular payment on
its restructured debt.
Argentina disobeyed the order, which was upheld on appeal
and turned down for a hearing by the U.S. Supreme Court last
month. That decision exhausted the Latin American nation's legal
"Two of the groups are being led by investment funds, one of
whom said it has about $100 million of untendered Argentine
sovereign debt represented," the source said.
"Then there are the Italians, mostly pensioners. They seem
to be happy with how events are unfolding. A fourth group trying
to organize is headed by Bingham McCutchen," the source said,
referring to the global law firm.
Bingham held a conference call on Monday afternoon to gather
investors interested in joining its group with the hope that it
earns a seat at any potential negotiating table.
Ironically it was at exactly the same time Argentine Economy
Minister Axel Kicillof made his way through a phalanx of
reporters on his way to meet the mediator, Daniel Pollack in New
York. Argentina said it would meet again with Pollack on July
11, but it was unclear if Kicillof or the holdouts would attend.
In its e-mail to potential members, Bingham said: "But given
Argentina's openly stated desire to resolve 100 percent of its
debt, we predict the most valuable holdout organization will be
one that credibly includes representation of as broad a base of
bonds as possible, at least for those not yet subject to
Bingham efforts cannot yet be described as a formidable
group, the source said.
"You would need probably a big mixture of institutional and
retail clients with $1 billion in debt represented. They don't
have that yet, but it is early days," the source said.
(Reporting By Daniel Bases; editing by Andrew Hay)