NEW YORK, Aug 6 (IFR) - International banks and holdout creditors of Argentine debt could reach an agreement as soon as next week, sources close to the situation told IFR on Wednesday, even though the two sides have so far been unable to agree on a price for the defaulted paper.
Negotiations to cure Argentina’s second default in 13 years have stalled several times in the past week, the sources said, even though an agreement has been close.
Local Argentine banks including Banco Macro were deep in negotiations last week to buy the debt from holdouts - litigant investors headed by Elliott Management subsidiary NML Capital and fellow hedge fund Aurelius Capital - which is valued at USD1.33bn par plus accrued interest.
Argentine institutions are thought to have taken a back seat in the talks, however, with international banks likely to be behind any successful deal. Sources have named JP Morgan, Citi and HSBC as the potential suitors.
A deal between holdouts and private banks is seen as a way to get around the so-called RUFO clause on restructured bonds that Argentina says is a stumbling block to reaching any resolution directly with the litigants.
The clause requires the sovereign to offer the same terms to exchange bondholders as it does to holdouts. It is thought that any bank that buys the defaulted debt from holdouts will benefit from an upside in secondary prices once the RUFO clause expires at the end of the year. (Joan.Magee@thomsonreuters.com) (Reporting By Joan Magee; Editing by Paul Kilby and Marc Carnegie)