(Adds details of settlement with Capital Markets Financial Services)
By Nate Raymond
NEW YORK, Feb 18 (Reuters) - A group of creditors suing Argentina over defaulted bonds on Thursday urged a U.S. judge to reject the country's request to lift orders restricting it from servicing its restructured debts, saying doing so would impede ongoing settlement talks.
In a brief filed in Manhattan federal court, bondholders including Elliott Management's NML Capital Ltd said they were "encouraged" by Argentine President Mauricio Macri's desire to resolve the litigation.
But the creditors said talks had only begun when Argentina on Feb. 5 made an "ambiguous" proposal to pay $6.5 billion to settle the dispute, and as a result the country's request to vacate injunctions imposed in the litigation was unwarranted.
Those injunctions required Argentina to pay creditors including NML and Aurelius Capital Management LP when the country serviced debts owed to bondholders who participated in two restructurings after Argentina's $100 billion default in 2002.
"Authorizing Argentina once again to violate plaintiffs' contractual rights would upend the negotiations that only now are just beginning in earnest and would risk new and unwanted litigation," lawyers for NML and Aurelius wrote.
Despite the arguments, Thursday's brief signaled a continued willingness by the major creditors to reach a deal.
In a statement on Thursday, mediator Daniel Pollack said Argentina had reached a settlement in principle with another bondholder, Capital Markets Financial Services, for over $110 million within the framework of the Feb.5 proposal.
The offer had already been accepted by two out of six of the leading bondholders in the litigation, billionaire investor Kenneth Dart's EM Ltd and Montreux Partners LP, who Argentina has agreed to pay more than $1.1 billion.
Speaking in Brasilia, Argentina's Finance Minister Alfonso Prat-Gay said negotiations are continuing and that he was "confident that Argentina wants to leave behind this 15-year issue that has left us at the margin of the world."
Argentina last week asked U.S. District Judge Thomas Griesa to vacate the injunctions after unveiling the settlement offer that represents a 27.5 percent to 30 percent discount for creditors who filed claims of about $9 billion.
Those creditors spurned Argentina's 2005 and 2010 debt restructurings, which resulted in 92 percent of its defaulted debt being swapped and investors being paid less than 30 cents on the dollar.
But in court papers, NML and Aurelius said lifting the injunctions was not called for, noting 86 percent of the plaintiffs in the litigation have yet to settle.
The hedge funds called Argentina's Feb. 5 proposal a "take-it-or-leave it" offer and an "ultimatum."
The proposed settlement is conditioned on the approval of the Argentine Congress and the lifting of the injunctions Griesa issued. (Reporting by Nate Raymond in New York; additional reporting by Alonso Soto in Brasilia and Sangameswaran S in Bengaluru; Editing by Chizu Nomiyama, Alan Crosby and Andrew Hay)