BUENOS AIRES – Argentina announced on Tuesday that it reached a $900 million preliminary accord to settle its pending debt with 50,000 Italian holders of defaulted Argentine government bonds.
“It represents approximately 15 percent of the debt that remained outside the (rescheduling) accords,” Finance Minister Alfonso Prat-Gay told a press conference.
He said that the agreement reached with Italian bondholders includes the Argentine government’s acknowledgement of the debt “and reasonable interest.”
A joint communique issued by the Argentine government and Task Force Argentina, which gathers together the Italian creditors, said the proposed accord “opens the possibility of strengthening the strong ties between Argentina and Italy, as well as investment between the two countries.”
Prat-Gay said that the prospective deal with the Italian bondholders is a step toward “closing the gap with the firmest litigants,” that is, the hedge funds headed by U.S. magnate Paul Singer.
Those hedge funds acquired Argentine bonds on the secondary market at large discounts following Buenos Aires’ massive 2001 debt default and refused to take part in the 2005 and 2010 debt restructurings.
The Singer-led plaintiffs won a ruling from U.S. District Judge Thomas Griesa ordering Argentina to pay them $1.3 billion plus interest before making further payments to the bondholders who accepted the restructurings.
While former President Cristina Fernandez was adamant about not paying Singer and the other litigating holdouts, the administration of Mauricio Macri, who took office in December, will present a new proposal this week in hopes of resolving the dispute.
“President Macri wants to strike an agreement as quickly as possible and in the fairest way possible. We’ve had several meetings with the mediator. The difficulty we have now is that there are some bondholders who are wanting to collect an interest rate that under any fair conditions is unacceptable,” Prat-Gay said.