UPDATE 2-Argentine holdout sees Repsol, Paris Club deals as model for talks

martes 1 de julio de 2014 14:22 GYT

(Adds Aurelius comment, details on deposit, background)

By Daniel Bases

NEW YORK, July 1 (Reuters) - Argentina's past deals to settle claims with Spanish oil major Repsol and the Paris Club of creditor nations could serve as examples of how to negotiate a settlement to a decade-old debt dispute, one of the lead holdout bondholders said on Tuesday.

Both of those deals, in total worth about $15 billion, allowed Argentina to preserve its dwindling foreign currency reserves, which stand at $28.5 billion.

Argentina faces a potential default unless it reaches a deal with holdout investors by July 30 when it must make a payment on its restructured sovereign debt. The holdouts rejected previous restructuring deals Argentina offered after it defaulted on about $100 billion in 2001-2002.

"In the case of the Paris Club, and this is quite important and illustrative, Argentina recognized after also about the same amount of time we have been dealing with our claims, recognized the total claim of the Paris Club, principal, interest, and penalties and agreed to settle it by paying a portion in cash and the bulk of it in bonds," Jay Newman, senior portfolio manager at Elliott Management, one of the lead holdouts in the sovereign debt dispute with Argentina, told CNBC TV.

Argentina was ordered in 2012 to pay the holdouts, led by Elliott Management Corp, and Aurelius Capital Management $1.33 billion plus accrued interest by U.S. District Court Judge Thomas Griesa in New York.

Argentina must pay holdouts at the same time it pays investors who accepted restructurings in 2005 and 2010. His ruling was upheld on appeal and denied a hearing by the U.S. Supreme Court, effectively exhausting Argentina's U.S. legal recourse.

A deal with the holdouts would be the final element in a campaign by the government to clear up its arrears and allow it to re-enter the international capital markets for desperately needed cash to help fund development, especially the 1,000-foot thick Vaca Muerta shale oil and gas field in Patagonia.   Continuación...