Argentina default spreads to Par bonds, raising acceleration risk

viernes 31 de octubre de 2014 08:15 GYT

By Sarah Marsh and Daniel Bases

BUENOS AIRES/NEW YORK Oct 31 (Reuters) - Argentina's debt default spread to its Par bonds on Friday after the country failed to complete an interest payment, raising the risk that creditors could demand that its cash-strapped government immediately repay all of its debt.

The country last month deposited a $161 million payment with a newly appointed local trustee to try to circumvent U.S. court orders for it to settle with "holdout" investors suing for full repayment of bonds from a 2002 default before paying debtholders who accepted a restructuring.

Yet Par bondholders faced legal and technical hurdles in collecting the payments, and the 30-day grace period since the coupon was originally due expired at midnight Thursday.

The economy ministry has not said whether any bondholders have come forward to collect.

Argentina had already defaulted in July on its Discount notes, but holders of the Par bonds are more likely to claim the accelerated payment of the principal because they are trading at a steeper discount to their original value.

An acceleration could leave Argentina facing claims of up to $30 billion, more than it holds in foreign reserves.

Sources owning Argentine debt say other creditors have approached them about forming a group to accelerate. The move would require the backing of investors holding at least 25 percent of the nominal amount of any single bond series.

"We were asked in very theoretical terms what our thoughts were on acceleration," said one source. "It was something intermediated by an investment bank. The shop leading the offer did not want to be identified."   Continuación...