NEW YORK, Dec 10 (Reuters) - Investors owning restructured Argentine sovereign debt have hired legal advisers Linklaters to help negotiate an end to a decade-long fight by holdout investors who refused to participate in two prior government-led debt exchanges.
In November these investors, who participated in one or both of the debt restructurings following Argentina’s sovereign default in 2001, formed an ad hoc committee to propose an offer to resolve the stand-off with the holdouts.
“Following years of litigation, the Ad Hoc Committee of Exchange Bondholders seeks to negotiate a consensual inter-creditor resolution with the holders of non-restructured bonds to end the decade-old stand-off stemming from Argentina’s 2001 default and subsequent restructurings of its debt,” global firm Linklaters said in a statement.
Gramercy Funds Management is a leading member of the ad hoc committee efforts. It said in November it wanted to come to a resolution and avoid a default by Argentina.
Linklaters declined to comment on how many bondholders are on the committee, nor how many restructured bonds, in aggregate, the committee represents. Gramercy declined to comment on the announcement.
Buenos Aires 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 the Argentine government said it would never do. Failure to make payments to both groups concurrently would result in a default on the already restructured debt held by Gramercy and the other exchange bondholders.
Holdout investors are being led by NML Capital Ltd, which is a unit of Paul Singer’s Elliott Management Corp, and Aurelius Capital Management.
Sources familiar with both sides say there has been no formal contact between the committee and the holdouts.
An Elliott spokesman declined to comment on the Linklaters announcement. An Aurelius spokesman was not immediately available.
The Linklaters’ team is being led by Martin Flics, a 10-year veteran of the firm who heads the U.S. restructuring practice. He is being joined by partners Conrado Tenaglia and Caird Forbes-Cockell, both of whom were involved in the 2010 re-opening of the restructuring.
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. (Editing by Dan Grebler)