Hedge funds backed by a US court in their demands for $1.3 billion from Argentina challenged the country’s economy minister Wednesday to enter talks with them this week.
NML Capital, one of two funds which sued Argentina for payment on defaulted bonds they hold, said Economy Minister Axel Kicillof should open talks with them during his trip to the United States.
“We’re ready to meet with Minister Kicillof during his visit to Washington, DC this week, and to negotiate without preconditions,” said Jay Newman, senior portfolio manager at Elliott Management, NML’s parent.
“We’re serious about negotiations, but we are still waiting for Argentina to engage in any dialogue with us.”
Kicillof was due in Washington on Thursday to address the Organization of American States on the problem of Argentina’s debts and creditors it labels “vultures”.
Buenos Aires says the ruling by New York federal judge Thomas Griesa that it cannot pay its main creditors unless it simultaneously pays the hedge funds what they claim on bonds they hold has put it on the verge of defaulting on all its debt for the second time in 13 years.
The hedge funds, also known as the holdouts, refused to join the majority of creditors in the 2005 and 2010 restructuring of some $100 billion in debt Argentina defaulted on in 2001.
Two weeks ago, the US Supreme Court backed Griesa’s 2012 ruling that the country has to repay the holdouts the full value of their bonds, and cannot pay other creditors unless it pays them at the same time.
Buenos Aires says it is being blocked from servicing its debt.
It asked the Organization of American States to discuss the case as an issue of “urgent and common interest… that transcends the financial aspects and has global implications and consequences.”
A ministerial-level OAS meeting is set for Thursday.
Both sides say the other has refused to talk, even after Argentina apparently missed Monday’s due date for a payment on its debt.
“What the ‘holdouts’ is saying is not true — they never sat down at the bargaining table,” Argentina’s cabinet chief Jorge Capitanich said Wednesday.
“They systematically and emphatically have rejected every possibility” of sitting down for talks, Capitanich said.
Kicillof has repeatedly said he does not need to meet with the holdouts, because lawyers from both sides are scheduled to meet next Monday with the Griesa-appointed “special master”, a US lawyer whose job is to find a solution before the country is formally called into default at the end of July.
Newman said Wednesday that his side is glad Argentina has agreed to meet with the special master next week in New York.
“But engagement with the court or with creditors doesn’t have to wait another week,” he added.