February 12, 2016 / 6:18 PM / in 2 years

Argentine debt talks to continue: mediator

NEW YORK (Reuters) - Argentina’s ongoing sovereign debt settlement talks will continue despite no resolution between the government and four remaining major holdout creditors, court-appointed mediator Daniel Pollack said in a statement on Friday.

“Claims by four other large ‘holdouts’ were not resolved this week, but intensive discussions between and among high-ranking Argentine Government officials, principals of those four firms and me have continued through the week,” Pollack said.

“These discussions have gone late into the night and will continue,” he said, noting that two large creditors have settled their claims in principle for an aggregated amount, between them, of “well over $1 billion.”

Pollack said that other investors with “substantial holdings of defaulted Argentine bonds” have also come forward expressing interest in settling and are working to reach an agreement with the government.

Two out of six leading bondholders, Dart Management and Montreux Partners, accepted the offer put forth by Argentina, court-appointed mediator Daniel Pollack said last week.

Argentina offered a pot of money, $6.5 billion, to settle the claims filed against it in the U.S. courts. The offer represents a 27.5 percent to 30 percent discount for creditors who filed claims of about $9 billion.

Holdouts led by Elliott Management and Aurelius Capital Management have led a more than decade-long legal fight in the U.S. courts against Argentina to collect on investments in sovereign debt defaulted upon in early 2002.

On Thursday, U.S. District Judge Thomas Griesa ordered the remaining holdouts to show cause as to why he should not vacate orders restricting Argentina from servicing its restructured debts in light of the settlement offer.

Mark Brodsky, Aurelius’ chairman, said given “the choice between accepting the substantial haircut we have offered, continuing negotiations, and litigating, Argentina chose to litigate.”

“This is a baffling continuation of the failed strategy of the past,” he said in a statement.

Brodsky previously said he believes, in the case of Dart Management which received a large portion of its favorable judgments from Griesa very early in the legal dispute, 2003, that they are getting more than 100 percent of what they are owed.

“Only 14 percent of the New York claims have been settled. Most of those were settled for more than 100 percent of the amount owed. For most other claims, Argentina proposes to pay not even 70 percent of the claim, but 70 percent of a substantially reduced claim – a double haircut. Holders of less than 5 percent of the claims have accepted that haircut,” Brodsky said on Friday.

However it was not possible to verify Brodsky’s claim and lawyers for Dart have not returned calls seeking comment.

Reporting by Daniel Bases; Additional reporting by Tariro Mzezewa and Nate Raymond; Editing by Jeffrey Benkoe and Chizu Nomiyama

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