Argentina debt talks set for 2016: mediator


NEW YORK–Argentina has agreed to negotiate in January 2016 with U.S. bondholders seeking US$10 billion, a court-appointed mediator said on Monday.

The long-running legal dispute has isolated the South American country and its ailing economy from global credit markets. But Daniel Pollack, who was appointed mediator last year, said in a statement that the settlement talks will begin in the second week of January in New York City.

The announcement came after Pollack met with Argentina’s finance chief Luis Caputo and Mario Quintana, the country’s deputy Cabinet chief. The mediator also has had meetings with bondholders, who include representatives of U.S. hedge funds.

The dispute over Argentina’s debt emerged after the South American nation had its worst economic crisis and defaulted on US$100 billion in debt in 2001. Most creditors accepted lower-valued bond swaps in 2005 and 2010. But U.S. hedge funds led by billionaire hedge fund investor Paul Singer’s NML Capital Ltd. refused took Argentina to court and won.

Former Argentine President Cristina Fernandez had long refused to negotiate with the hedge fund creditors, often calling them “vultures.”

The holdouts spent more than a decade litigating for payment in full rather than agreeing to provide Argentina with debt relief. They also sent lawyers around the globe trying to force Argentina to pay its defaulted debts and were able to get a court in Ghana to temporarily seize an Argentine naval training ship. The threat of seizures even forced Fernandez to stop using her presidential plane and instead fly on private jets.