Argentina offers U.S. creditors $6.5 billion payment on defaulted debt

By Daniel Bases and Sarah Marsh
U.S.-court appointed mediator Daniel Pollack exits his midtown Manhattan office after a meeting on Argentina's debt crisis, in New York February 4, 2016. REUTERS/Brendan McDermid

By Daniel Bases and Sarah Marsh

NEW YORK/BUENOS AIRES (Reuters) - Argentina made a formal debt payment offer to U.S. creditors who hold its defaulted bonds on Friday, seeking to end a more than decade-long legal battle that transformed the South American country into a financial markets pariah.

The offer, which asks creditors to take a reduced payment, followed five days of talks in New York between Argentine Finance Secretary Luis Caputo and New York hedge funds led by Elliott Management and other creditors that filed about $9.9 billion in claims.

In a statement, Argentina's finance ministry said the proposal broadly amounted to a reduction or so called haircut of 25 percent and would entail "a payment of approximately $6.5 billion if all the bondholders accept it".

There are two separate proposals for different classes of bondholders.

In a separate statement, mediator Daniel Pollack praised Argentine President Mauricio Macri's "courage and flexibility" and added that two of the leading six holdout investors had already agreed to the terms.

Macri must now get the deal through Congress, where no party holds a lower house majority. Macri may be able to bargain with dissident Peronists and parliamentarians allied to defeated presidential candidate Sergio Massa.

(Reporting by Davide Scigliuzzo of Thomson Reuters IFR and Buenos Aires newsroom; writing by Sarah Marsh in Buenos Aires; Editing by Dan Grebler and Andrew Hay)