UPDATE – Argentina offers US creditors US$6.5bn payment on defaulted debt
Argentina made a formal debt payment offer to US 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.
(Recasts with proposal, new throughout)
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 US$9.9bn in claims.
In a statement, Argentina’s finance ministry said the proposal broadly amounted to a reduction or so called haircut of 25% and would entail “a payment of approximately US$6.5bn 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.
Additional reporting by Reuters Buenos Aires newsroom