Argentina settles bond debt dispute partially

New York / AP

Argentina has reached a settlement with several bondholders for $250 million and 185 million euros, a court-appointed mediator said as the country continues work toward ending a debt crisis that has damaged its ability to maneuver financially abroad.
The latest deals boost to more than $1.5 billion the amount Argentina has committed in deals since President Mauricio Macri took office on Dec. 10.
Court-appointed mediator Daniel Pollack has announced a string of agreements over several weeks after Argentina announced it expected to pay about $6.5 billion to settle claims of about $10 billion by bondholders, including U.S. hedge funds.
The latest settlements involve bondholders including Lightwater Corp, Old Castle Holdings, VR Capital, Procella Holdings and Capital Ventures International, Pollack said.
The bondholders refused to swap their bonds at a steep discount when Argentina offered swaps in 2005 and 2010 to ease its financial crisis after it defaulted on $100 billion in bonds in 2001. They went to court instead, winning judgments.
Meanwhile, 93 percent of Argentina’s creditors accepted the exchange offers, trading their bonds for new ones worth between 25 percent and 29 percent of the original value of the bonds.
Pollack announced the latest settlements the day Argentina asked a Manhattan federal appeals court to drop oral arguments scheduled for Wednesday in one of several cases involving bondholders.
Argentina said in court papers filed with the 2nd U.S. Circuit Court of Appeals that it had decided to drop the appeals since Macri took office.
Lawyer Michael C. Spencer, representing bondholders involved in the cases set to be heard Wednesday, filed papers late Monday saying a lower-court judge was too eager to vacate court orders protecting bondholders and the appeals court should ensure bondholders remain protected by blocking their dismissal.
Spencer, saying he represented several hundred people and small-fund bondholders with claims of more than $832 million, complained that Judge Thomas Griesa was rushing to collapse the force of court orders against Argentina.
In a written ruling Friday, Griesa noted that Macri’s government has consistently declared a desire to resolve its disputes with foreign investors and that the new stance has been welcomed in the United States, where Treasury Secretary Jacob Lew has commended it efforts.
Griesa said he recognized Argentina’s “earnest efforts to negotiate and its striking change in attitude” since Macri took office and was prepared to automatically lift court orders standing in the way of agreements with bondholders as soon as Argentina repeals all legislative obstacles to settlements and once it satisfies the terms of its deals.
“Allowing the republic to reenter the capital markets will undoubtedly help stimulate its economy and thus benefit its people,” the judge wrote. “It might even encourage other indebted nations to choose compromise over intransigence.”