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Saturday, June 22, 2024 | Back issues
Courthouse News Service Courthouse News Service

Argentina Reaches $4.6B Deal With Bond Holdouts

MANHATTAN (CN) - To end 15 years of litigation with holdout bondholders owned by a Republican billionaire, Argentina agreed Monday to pay a $4.6 billion settlement.

Paul Singer's New York-based companies NML Capital and Aurelius Capital Management earned the nickname "vulture funds" for their practice of buying the distressed debt of poor countries for pennies on the dollar.

Argentina was on the verge of economic collapse when it sold its debt at deep discounts, and the funds filed suit when the South American nation defaulted on the bonds.

Though President Cristina Fernandez de Kirchner refused to negotiate with the holdout bondholders, new President Mauricio Macro reversed course after his swearing-in this past December.

Daniel Pollack, a court-appointed "special master" to handle the negotiations, on Monday announced a settlement after three months of "around-the-clock negotiations" between Argentina and Singer's firm, Elliot Management.

If consummated, NML Capital and other funds will take home roughly $4.653 billion "to settle all claims, both in the Southern District of New York and worldwide," Pollack said.

"This is a giant step forward in this long-running litigation, but not the final step," Pollack warned.

The agreement still needs approval from Argentina's congressional body.

Pollack said he hopes the government will settle up with the four bond holdouts Elliott Management, Aurelius Capital, Davidson Kempner and Braceridge Capital - within the next six weeks.

"There are many people who have devoted untold hours or special talents, or both, to making this settlement possible," Pollack said in a statement.

Voicing high praise for the new president of Argentina, Pollack called Marco's decision to negotiate and pay investors "nothing short of heroic."

"A settlement is, by definition, a compromise and, fortunately, both sides to this epic dispute finally saw the need to compromise, and have done so," Pollack said.

After U.S. District Judge Thomas Griesa found Argentina in contempt of court, the Second Circuit affirmed last year.

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