Wednesday 13 December 2017

International banks form group to buy Argentine debt

Billionaire Eduardo Eurnekian
Billionaire Eduardo Eurnekian

Erik Schatzker

International banks are looking to put together a group of investors to buy disputed Argentine debt and resolve a US lawsuit that is blocking the country from servicing any of its foreign bonds.

The banks are seeking investors willing to purchase bonds left over from the nation's 2001 default held by firms led by Elliott Management, said Eduardo Eurnekian, an Argentine billionaire who has been approached by bankers. While Elliott has a court order for full repayment, a banker familiar with the talks speculated the New York-based hedge fund would accept a settlement worth about 80c to 85c on the dollar.

At stake for the banks, which include Citigroup, is an opportunity to help Argentina resume payment on its bonds and regain access to overseas markets, bolstering the value of the debt and earning good will that could lead to underwriting business when the country starts issuing notes again.

For now, Argentina finds itself back in default, having been forced to miss a €402m interest payment last month on restructured bonds when a US court ruled it couldn't service those notes without also making good on its €1.1bn debt with Elliott and other holdouts.

In addition to Citigroup, JPMorgan Chase, HSBC and Deutsche Bank have also been in discussions with investors to resolve the dispute.

Irish Independent

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