Argentina’s negotiations with creditors to resolve a dispute over US$1.5 billion in unpaid debts remained deadlocked following talks on Friday, setting it on a course for a possible catastrophic default next week.
Argentina will default for the second time in 13 years if it cannot reach a deal with US hedge funds before Wednesday.
Daniel Pollack, the court-appointed mediator in the dispute, met with Argentine officials and in a statement released after the talks said that progress had not been reached. Pollack also said the Argentines were returning to Buenos Aires Friday night, but he expects more talks before the deadline.
Following a US judge’s order, Argentina cannot pay investors who accepted lower-valued bonds after its record US$100 billion default in 2001 unless it also pays off creditors who did not participate in previous bond swaps.
Argentine President Cristina Fernandez has long refused to negotiate with the plaintiffs led by New York billionaire Paul Singer’s NML Capital Ltd, who spent more than a decade litigating for payment in full, rather than agreeing to provide Argentina with debt relief.
However, Fernandez has been backed into a corner by NML Capital’s payment plan and has been sending a delegation to meet the negotiator in New York in hopes of averting a default.
The holdout creditors accuse Argentina of refusing to negotiate to provoke a default.
“Argentina’s government made clear that it will be choosing to default next week. Creditors arrived at the [debt mediator’s] office this afternoon prepared to negotiate and willing to be flexible in forging a solution,” NML spokesman Stephen Spruiell said in a statement on Thursday. “Argentina again refused to negotiate any aspect of the dispute.”
Paying the hedge funds that Fernandez often calls “vultures” in full would likely trigger lawsuits from other bondholders demanding to be paid on similar terms. Argentina’s government estimates that the liability could run up to US$15 billion.
With nearly US$29 billion in foreign reserves, Argentina appears to have the money to pay its bills, but those reserves include loans to other countries, deposits with the IMF and other assets that are not easily used. Take those away, and Argentina has about US$16 billion on hand.
Troubled countries often find bond investors willing to lend to them to pay other creditors, but Argentina has been locked out of the bond markets for more than a decade. Some investors would probably step up to lend it money, but at high interest rates — and at high political cost for the leftist government.
DITCH TACTICS: Kenyan officers were on their way to rescue Haitian police stuck in a ditch suspected to have been deliberately dug by Haitian gang members A Kenyan policeman deployed in Haiti has gone missing after violent gangs attacked a group of officers on a rescue mission, a UN-backed multinational security mission said in a statement yesterday. The Kenyan officers on Tuesday were on their way to rescue Haitian police stuck in a ditch “suspected to have been deliberately dug by gangs,” the statement said, adding that “specialized teams have been deployed” to search for the missing officer. Local media outlets in Haiti reported that the officer had been killed and videos of a lifeless man clothed in Kenyan uniform were shared on social media. Gang violence has left
US Vice President J.D. Vance on Friday accused Denmark of not having done enough to protect Greenland, when he visited the strategically placed and resource-rich Danish territory coveted by US President Donald Trump. Vance made his comment during a trip to the Pituffik Space Base in northwestern Greenland, a visit viewed by Copenhagen and Nuuk as a provocation. “Our message to Denmark is very simple: You have not done a good job by the people of Greenland,” Vance told a news conference. “You have under-invested in the people of Greenland, and you have under-invested in the security architecture of this
A fire caused by a burst gas pipe yesterday spread to several homes and sent a fireball soaring into the sky outside Malaysia’s largest city, injuring more than 100 people. The towering inferno near a gas station in Putra Heights outside Kuala Lumpur was visible for kilometers and lasted for several hours. It happened during a public holiday as Muslims, who are the majority in Malaysia, celebrate the second day of Eid al-Fitr. National oil company Petronas said the fire started at one of its gas pipelines at 8:10am and the affected pipeline was later isolated. Disaster management officials said shutting the
Japan unveiled a plan on Thursday to evacuate around 120,000 residents and tourists from its southern islets near Taiwan within six days in the event of an “emergency”. The plan was put together as “the security situation surrounding our nation grows severe” and with an “emergency” in mind, the government’s crisis management office said. Exactly what that emergency might be was left unspecified in the plan but it envisages the evacuation of around 120,000 people in five Japanese islets close to Taiwan. China claims Taiwan as part of its territory and has stepped up military pressure in recent years, including