Argentina creditors asked a U.S. judge to allow intermediaries to identify restructured debt holders, so the South American nation can seek their waiver of a clause that may scuttle any deal with holders of defaulted bonds, Bloomberg News reported yesterday. While Argentina has said that it’s seeking to negotiate with holdouts, the nation may be constrained by a “rights against future offers” clause that obliges it to extend any improved offer on defaulted bonds to holders of restructured debt. Since restructured debt holders settled for about 30 cents on the dollar, they could cite the clause to demand equal treatment if a better offer is made. Holdouts argued that the move may be a ruse to circumvent the court and pay restructured debt holders. U.S. District Judge Thomas Griesa in Manhattan last month blocked trustee Bank of New York Mellon Corp. from paying restructured bondholders $539 million it got from Argentina. The nation was barred by the judge from making those payments unless it pays defaulted bondholders in full. Judge Griesa set July 22 as the next hearing in the bond battle, when he will rule on motions by both sides just one week before restructured holders must be paid, or Argentina faces its second default in 13 years.
http://www.bloomberg.com/news/2014-07-16/argentine-creditors-seek-names…
In related news, the Wall Street Journal today reported that if Argentinian President Cristina Kirchner opts to settle with two New York hedge funds that have won court-ordered awards of more than $1.5 billion, economists say that it will most certainly lead to additional claims that will cost Argentina's government about $13 billion. Kirchner and her top economic aides have fought against paying out the full value on bonds the hedge funds bought cheap, mostly after Argentina's massive 2001 default. Calling the creditors "vultures" and their demands "extortion," the Argentine government says that paying the hedge funds would open the floodgates to myriad suits costing $120 billion and drive the country into bankruptcy. But economists and former policy makers in Kirchner's government said that while Kirchner is right about Argentina facing a hefty bill, the cost is likely to be far less than what Argentine officials have claimed. And they say that the government could soften the blow by negotiating a payment schedule and offering compensation in bonds. (Subscription required.)
http://online.wsj.com/articles/if-argentina-settles-debt-dispute-more-c…