UPDATE: International banks eye Argentina holdout debt
By Joan Magee
NEW YORK, July 31 (IFR) - International banks could be joining the effort to buy up the Argentine debt from sovereign's holdout creditors and resolve the messy default standoff, multiple sources said Thursday.
Just as Argentina went into its second default in 13 years following a bitter legal fight in the US courts, third-party banks were said to be mulling an offer to buy the bonds.
The wrangling over the debt in question - most of it bought on the cheap by hedge funds - led Argentina to miss a payment this week on other restructured debt and thus go into default.
A last-ditch effort by domestic Argentine banks to buy the debt, and allow the sovereign to save face by not paying in full the "vulture funds" that are holding out, failed on Wednesday.
"There has to be a way to broker a private solution," said one bank managing director.
"There is a stigma in the eyes of the Argentine government about paying the so-called vulture funds; they see that as a defeat. It's all psychological."
Sources said the local banks were also still in the running for the roughly US$1.6bn purchase, which would account for par value of the bonds plus accrued interest.
Argentine newspaper Ambito named JP Morgan, Citi and HSBC as potential suitors for the holdout bonds. Continuación...