UPDATE 3-Argentina's Fernandez says willing to talk with all creditors

viernes 20 de junio de 2014 16:53 GYT

(Adds economic and political context)

By Hugh Bronstein

BUENOS AIRES, June 20 (Reuters) - Argentine President Cristina Fernandez said on Friday her government would negotiate with all the country's creditors, in a bid to avoid default that sparked a market rally on hopes that the country's long debt-related court battles may soon end.

"We want to pay 100 percent of creditors," she said in a speech celebrating Argentine Flag Day. Local markets were closed for the holiday, but international bond spreads, which measure default risk, tightened sharply after she spoke.

Argentina is in a 12-year-old fight in the U.S. courts with holdout creditors, who declined to participate in a 2005 and 2010 revamp of debt securities in which more than 90 percent of holders accepted about a third of the original value of their bonds.

Until Friday Fernandez had refused to even consider talking to the holdouts, disparaging them for years as "vultures" out to take advantage of the country's 2002 sovereign default, which thrust millions of middle-class Argentines into poverty.

Gone was any harsh rhetoric in Fernandez's Friday remarks.

"Argentina is willing to have a dialogue," she said.

On Monday, the U.S. Supreme Court declined to hear an appeal by Argentina in its battle against the holdouts. This left intact a ruling by U.S. Judge Thomas Griesa in New York that threatened a new default by ordering the country to pay the holdouts at the same time it pays holders of restructured debt.   Continuación...