Argentina Settles $1.1 Billion To 2 Creditors Over Defaulted Debt

Argentina will be paying two creditors an amount of over $1.1 billion over the 2002 defaulted debt. The payment is the Latin America's move to settle a long-running proceeding that has been happening for about 15 years.

Court papers filed in Manhattan court revealed that Argentina will be paying billionaire investor Kenneth Dart's EM Ltd $849.2 million. EM Ltd is one of the six leading bondholders that participated in Argentina's proposal to resolve the lawsuit for $6.5 billion, VOA News reports.  Aside from EM Ltd, Montreux Partners LP will be paid nearly $298.7 million.  In an earlier report, Daniel Pollack, a court-appointed mediator, didn't disclose the breakdown for Argentina's payment to creditors.  The agreement first came to light after President Mauricio Macri proposed paying $6.5 billion to settle its $100 billion defaulted debt.

"The settlement fits within the numerics of the Proposal publically issued by the Republic on February 5, and calls for payment of 100% of the principal and 50% of interest on the principal for each class member. The settlement is subject to two conditions: first, the approval by the Congress of Argentina, including the lifting of the Lock Law and the Sovereign Payment Law, and 2) the lifting of the Injunctions by Judge Griesa," Pollack said in a statement on Feb. 16, according to Market Watch.

"As Special Master I am continuing to try to bring about settlements with other Bondholders, and am hopeful that there will be more settlements to come. I will have no further comment on this Agreement in Principle today," Pollack continued in the statement.

EM Ltd and Montreux were the only one that accepted the offer.  As of this late, four other prime creditors including Elliott Management's NML Capital Ltd and Aurelius Capital Management LP haven't entertained the offer to settle the 2002 defaulted debt, Yahoo reveals.  The settlements are conditioned on the lifting of the injunctions in the litigation and on the approval of the Argentine congress. It also represents a 27.5 to 30% discount for creditors with claims of nearly $9 billion.

After Argentina's defaulted debt restructuring, the country offered 30 cents on the dollar in new bonds.  Nearly 93% of the holders agreed with the offer, while the remaining are still firm to reject the settlement.

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Argentina defaulted debt, defaulted debt, Argentina Debt Crisis, Argentina payment of $1.1 billion, President Mauricio Macri

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