Argentina, creditors agree $155 million more in default settlement: mediator
By Daniel Bases
NEW YORK (Reuters) - Argentina settled with an additional 115 individual creditors holding defaulted sovereign bonds for $155 million, Daniel Pollack, the court-appointed mediator in the long-running case, said on Friday.
Pollack's announcement brings the total amount of settlements agreed in principle with U.S. creditors for more than the original $6.5 billion pot of money committed to end the dispute. The most recent settlement also moves Latin America's No. 3 economy closer to ending a festering 14-year legal battle over its historic default.
"The parties anticipate that most of these bondholders, all of whom have both money judgments and injunctions, will opt to receive 70 percent of their claims rather than 150 percent of the principal of their bonds, both of which are options available to them," under the terms offered by the government on Feb. 5, Pollack said.
Since the election of President Mauricio Macri in November, Argentina has moved swiftly to settle the debt dispute, mainly with U.S.-based hedge funds that sued in federal court for full payment on sovereign bonds defaulted upon in early 2002.
On Feb. 2, it reached a $1.35 billion agreement to settle with a group of Italian investors who held defaulted bonds.
On Feb. 5, it committed to spending $6.5 billion in order to settle more than $9 billion worth of claims in the U.S. courts before U.S. District Judge Thomas Griesa. So far it has agreements from more than 85 percent of remaining holdouts.
It reached agreement in principle with four major U.S. holdout creditors on Feb. 29 for $4.65 billion. They have until April 14 to deliver the cash.
"As with all such settlements, these are subject to the lifting of the Lock Law and the Sovereign Payment Law by the Argentine Congress and the lifting of the Injunctions by Judge (Thomas) Griesa," Pollack said.
Griesa's 2012 ruling barred Argentina from paying creditors who settled previously in 2005 and 2010 for less than 30 cents on the dollar without also making a court-awarded payment to the holdout creditors.
The injunctions were removed by Griesa on March 2. The issue is now being heard before the U.S. 2nd Circuit Court of Appeals.
"This group of 115 individual bondholders had appealed the vacating of the Injunctions by Judge Griesa, but have now withdrawn their appeals with prejudice," Pollack said.
On March 16, Argentina's lower house of Congress supported Macri's legislative efforts, voting 165 to 86 in favor of removing those legal impediments.
The dispute shut Argentina shut out of the international capital markets.
Legislators loyal to former leftist president Cristina Fernandez, a Peronist who refused to negotiate with the bondholders, argued Macri was selling out to Wall Street investors by offering repayment terms of 70-75 cents on the dollar.
Argentina plans to sell three bonds for a total of $11.68 billion in mid-April in order to pay the creditors in cash.
(Reporting By Daniel Bases; Editing by Chizu Nomiyama and Alistair Bell)
