December 10, 2015 / 12:18 AM / 4 years ago

Incoming Argentina official will begin debt talks 'promptly': mediator

NEW YORK (Reuters) - A court-appointed mediator in the Argentina debt dispute said on Wednesday that the country’s incoming secretary of finance intends to begin settlement talks in the long-running litigation “promptly.”

An Argentine 100 pesos bank note, featuring an image of former first lady Eva Peron, is displayed next to a $100 dollar note in Buenos Aires, September 17, 2014. REUTERS/Enrique Marcarian

Daniel Pollack, a New York lawyer appointed to oversee the settlement discussions, confirmed he had a meeting earlier this week at his offices with the incoming finance official, Luis Caputo.

Pollack said Caputo expressed the intention of the new administration to commence settlement negotiations “promptly” after Argentine President-elect Mauricio Macri is sworn into office on Thursday.

Pollack said he also met a week earlier with representatives of bondholders holding $10 billion in judgments against Argentina. No substantive negotiations to resolve the litigation occurred at either meeting, he said in a statement.

The statement came a day after a spokesman for incoming Economy Minister Alfonso Prat-Gay disclosed the meeting between Caputo and Pollack, who was named to oversee talks to resolve cases flowing from Argentina’s $100 billion default in 2002.

Aurelius Capital Management, a leading creditor in the litigation, in statement later on Wednesday said it looked “forward to meeting with Argentina’s new officials and working toward a prompt, constructive and long-overdue settlement to our dispute.”

Macri, who was elected last month, has made settling the multi-year dispute between Argentina and creditors who rejected the terms of the country’s 2005 and 2010 bond restructurings a high priority.

The holdout creditors spurned Argentina past debt restructurings, which resulted in 92 percent of its defaulted debt being swapped and investors being paid less than 30 cents on the dollar.

Argentina defaulted again in July 2014 after refusing to honor court orders to pay $1.33 billion plus interest to holdouts including Elliott Management’s NML Capital Ltd and Aurelius when it paid restructured bond holders.

U.S. District Judge Thomas Griesa in Manhattan, who has overseen the litigation, in October extended similar relief to holders of several billions of dollars more in defaulted bonds.

The judge has repeatedly urged Argentina to reach a settlement, and appointed Pollack to facilitate talks.

But outgoing President Cristina Fernandez resisted settling and called the hedge funds suing the country “vultures” and “terrorists.”

Macri, the business friendly mayor of Buenos Aires who won the Nov. 22 presidential runoff election, last week expressed confidence that a deal could be reached with the holdout creditors.

Asked if it was possible in 2016, Macri said, “Yes, of course.”

Reporting by Nate Raymond in New York; Editing by Jeffrey Benkoe and Tom Brown

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