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UPDATE 1-Argentine economy minister to meet mediator in debt case
July 7, 2014 / 12:25 AM / 3 years ago

UPDATE 1-Argentine economy minister to meet mediator in debt case

(Adds details on negotiations)

BUENOS AIRES, July 6 (Reuters) - Argentina’s Economy Minister Axel Kicillof will head its mission to meet with a court-appointed mediator on Monday in the country’s dispute with holdout investors in its bonds, the economy ministry said in a statement on Sunday.

Argentina needs to reach a deal with the holdouts who rejected its debt restructurings in the wake of its 2002 default on $100 billion in order to avoid a fresh default as it grapples with recession and dwindling foreign reserves.

The economy ministry announced last week it would send a mission to New York to meet with mediator Daniel Pollack. But it said the composition of the team had not been decided, raising questions over whether Argentina would send an official with sufficient authority to negotiate - such as Kicillof.

The minister has sealed a number of deals with foreign investors and creditors over the past few months, such as the Paris Club of wealthy creditor nations and Spanish oil major Repsol in a bid to attract investment back to Argentina and regain access to global capital markets.

Argentina will not make a formal offer on Monday to settle its dispute with the holdouts led by hedge fund Elliott Management’s NML Capital, an Argentine daily wrote at the weekend, citing economy ministry sources.

It wanted to check if the holdouts would simply insist on being paid the full value of their bonds, namely $1.33 billion plus accrued interest, as ordered by U.S. District Court Judge Thomas Griesa, or if they were interested in genuine negotiations, newspaper Pagina/12 wrote.

Argentina also wanted to ask 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, the paper wrote.

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 of the original value of their bonds. (Reporting by Sarah Marsh; Editing by Eric Walsh)

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