(Adds jump in bond prices)
By Walter Bianchi
BUENOS AIRES, July 10 Argentina said on Thursday
it would send a team of technocrats rather than its economy
minister to its second meeting on Friday in New York with a
court-appointed mediator in its dispute with holdout investors
over its sovereign debt.
Argentina needs to seal a deal before a July 30 deadline
with investors who rejected its debt restructurings after its
catastrophic 2002 default on $100 billion. Growing optimism it
will reach one sent its bonds higher on Thursday.
With no deal, Latin America's No. 3 economy risks tumbling
into a new default at the same time as it battles a recession,
one of the world's highest inflation rates and dwindling foreign
"The mission that will meet with the special master Daniel
Pollack in New York will be carried out by the juridical and
financial team of the economy ministry and other areas of the
government," Argentine Cabinet Chief Jorge Capitanich told
reporters at his daily briefing. He said Economy Minister Axel
Kicillof will not participate.
U.S. District Judge Thomas Griesa has ruled Argentina must
immediately pay the group of holdouts, led by hedge funds
Elliott Management Corp and Aurelius Capital Management, the
full value of their bonds, worth $1.33 billion plus accrued
Argentina has said this was impossible as it could prompt
claims totalling more than $100 billion. The country now has
just $29.5 billion in reserves.
For years, Argentina has refused to negotiate with the
holdouts, portraying them as "vultures" circling the corpse of
its 2002 default that plunged millions of Argentines into
poverty, and buying bonds in the secondary market at a steep
But faced with the spectre of default, it now says it is
willing to talk, and wants to complete a deal with all of its
creditors, including other holdouts and the investors who
accepted the tough terms of its 2005 and 2010 debt swaps.
Creeping optimism Argentina will reach a deal sent benchmark
Discount bonds up 5.7 percent to 93.50 on the
local over-the-counter market on Thursday, while Par bonds
rose 8.10 percent to 53.40.
Griesa appointed Pollock to find common ground in the
years-long battle that has delayed Argentina's return to
international capital markets since its 2002 banishment.
Kicillof, who has settled disputes with the Paris Club of
creditor nations and Spain's Repsol in recent months in an
attempt to regain the trust of foreign investors, spent four
hours on Monday discussing the case with Pollack and described
the session as an "important advance."
If Argentina does not complete a deal, Judge Griesa has said
he will continue blocking it from making a coupon payment on its
restructured bonds that was already due on June 30. A 30-day
grace period ends July 30.
Both the holdouts and Argentina have sought to win over
public opinion in recent weeks, spending around $1 million
combined on full-page advertisements in major newspapers around
the world to argue their cases.
(Additional reporting by Sarah Marsh and Nessi Hernan; Editing
by W Simon and J Benkoe)