Argentina’s offer to pay billions to settle a dispute with a group of hedge fund investors led by the billionaire Paul E. Singer may have been a victory for both the South American nation and the hedge funds, but it has left many small bondholders out in the cold, the New York Times DealBook blog reported yesterday. Lawyers for bondholders that were not included in the $4.65 billion deal Argentina made with the holdout hedge funds have argued that they will get far worse terms if they agree to a separate $6.5 billion proposal that Argentina made on Feb. 5. Singer’s NML Capital will have made about 369 percent, or $2.4 billion, on defaulted bonds whose principal value was $617 million, according to data from the finance ministry of Argentina that was filed to the court on Monday. Bracebridge Capital, another holdout hedge fund, will be paid $1.15 billion, representing a 952 percent return on bonds with principal worth $120 million, according to the data.
