NEW YORK, Aug 12 (IFR) - Argentina’s holdout creditors and international banks are struggling to strike a deal on the sovereign’s debt, sources close to the situation said on Tuesday.
Citi, Deutsche Bank, HSBC and JP Morgan last week offered the holdouts 40 cents on the dollar for the roughly US$1.66bn bonds, including interest, they own, and raised that offer to 50 cents on Monday, the sources said.
But that is way below the 80 cents that was first proposed by banks last week.
“These are not fully-baked proposals,” said a source from one of the holdout firms -- hedge funds led by Aurelius Capital and NML Capital.
“Our insecurity and the insecurity of the banks has been that the government hasn’t given any indications regarding price points or structure once January hits,” a source close to the talks said.
In January, the so-called RUFO clause is no longer valid. Argentina has repeatedly said that it cannot offer better terms to the holdout investors because it would trigger the RUFO clause and expose it to billions of dollars worth of claims.
Talks between the banks and the holdouts have been ongoing since July 30, when Argentina defaulted on its debt for the second time in 13 years.
Sources close to the banks say talks are still ongoing.
Citigroup and JP Morgan declined to comment, while HSBC and Deutsche Bank did not respond to requests for comment. (Reporting by Joan Magee; Additional reporting by Davide Scigliuzzo; Editing by Paul Kilby and Natalie Harrison)