NEW YORK, (Reuters) – Argentine officials will seek next week to negotiate for the first time with hedge funds that refused to take part in its debt restructuring, a lawyer for the country said in Manhattan federal court yesterday, potentially bringing the country closer to resolving a years-long legal battle.
“I’ve been informed by Argentina that the authorities will be in New York next week and want to negotiate with the holdouts,” said Carmine Boccuzzi of Cleary Gottlieb Steen & Hamilton at a hearing before U.S. District Judge Thomas Griesa in Manhattan.
Griesa had ordered Argentina to pay the holdout funds $1.33 billion at the same time it pays bondholders who participated in the 2005 and 2010 restructurings of Argentina’s $100 billion of bonds. The restructured bond holders are due a payment on June 30.
If the payment isn’t made, Argentina would enter a technical default on the restructured debt.
Any meeting between the hedge funds and Argentine officials would be their first and could herald the beginning of the end of one of the longest-running sovereign debt crises in recent memory. It has kept the country from accessing international capital markets since defaulting on $100 billion in debt in 2001-2002.
The negotiations would be part of an attempt by the country to avoid default, though Boccuzzi said “an exchange offer is not happening at this time.”
The two sides have been brawling in court for years, potentially leading to contentious negotiations. At Wednesday’s hearing, a lawyer for hedge fund NML Capital, Robert Cohen of Dechert, said Cleary lawyers had made “obviously untrue” representations to Judge Griesa at a hearing earlier this month, when Jonathan Blackman and Boccuzzi told Griesa that Argentina was not planning a restructuring to evade U.S. court orders.
