BUENOS AIRES, July 5 (Reuters) - Argentina will not make a formal offer to settle its dispute with holdout investors in its sovereign debt at its meeting on Monday with a court-appointed mediator, an Argentine daily wrote on Saturday, citing Economy Ministry sources.
After a string of adverse U.S. court decisions, Argentina has until the end of July to settle with a group of creditors who refused to accept the terms of its restructurings following its 2002 default on $100 billion of debt.
The government regularly denigrates them as vulture funds circling the remains of the country’s debt crisis, which pushed millions of middle-class Argentines into poverty.
But if it fails to seal a deal with them, Argentina risks tumbling into a fresh sovereign debt default at the same time as it grapples with recession, one of the world’s highest inflation rates and dwindling foreign reserves.
The newspaper Pagina/12 wrote that Argentina’s mission to meet with mediator Daniel Pollack in New York wanted to check if the holdouts would simply insist on being immediately paid the full value of their bonds, namely $1.33 billion plus accrued interest, as ordered by U.S. District Court Judge Thomas Griesa.
“We are going to listen to the mediator and we want to know if there is the possibility of a genuine negotiation or if the vultures expect the ruling to be carried out as it was dictated by Griesa,” an Economy Ministry source told Pagina/12.
The paper added that Argentina wanted to ask the mediator if there was a possibility of negotiating a deal to settle the claims of all holdouts, while ensuring it was not exposed to fresh lawsuits from the creditors who accepted the tough terms of its debt swaps in 2005 and 2010.
Argentina has previously said it cannot voluntarily offer better terms for a restructuring with holdouts because of a clause that expires on Dec. 31 designed to stop anyone getting a better deal than bondholders who had already settled.
More than 92 percent of Argentina’s investors received less than one-third the original value of their bonds.
Pagina/12 said the ministry had not excluded the possibility that Economy Minister Axel Kicillof, who has sealed many deals with foreign investors and creditors in recent months, could lead the delegation on Monday.
Pollack issued a statement on Thursday saying Argentina’s lawyers had confirmed its delegation would include government officials ranked below Kicillof such as the secretary of finances.
Hours later, however, Kicillof told a news conference the composition of the team had not been decided. (Reporting by Sarah Marsh and Maximilian Heath)