Markets scramble to find answer to Argentina default

viernes 8 de agosto de 2014 10:11 GYT

By Davide Scigliuzzo and Christopher Spink

NEW YORK, Aug 8 (IFR) - Investors, bankers and legal experts are scrambling to find ways to end Argentina's decade-long legal dispute with holdouts before acceleration complicates the situation for all parties involved.

An all-inclusive debt exchange, a buyback of debt held by holdouts and a waiver of the controversial RUFO clause are all ideas being pushed forward.

Hopes that international banks would cut a deal to buy a portion of the US$1.66bn in holdout claims lifted debt prices last week as investors bet that such a solution would ultimately cure the country's default

However, the threat of "me-too" claims and growing scepticism over the government's ability to guarantee full payment next year left strong doubts in many observers' minds whether such negotiations would prove fruitful.

The best option on the table, say some observers, involves recent efforts to collect signatures among creditors to waiver the RUFO clause that requires Argentina to offer the same terms to both litigants and holders of restructured debt.

The elimination of the RUFO clause would lift what the government has often cited as a major stumbling block in its ability to cut a deal with holdouts.

"The only more or less viable sign of progress is the initiative by a substantial group of exchange bondholders to solicit a RUFO waiver," said Carlos Abadi, CEO of ACGM, a boutique investment bank.

In some observers' eyes, such a move would call the government's bluff and prove whether or not it is genuine in its gestures to negotiate with hedge funds led by Aurelius Capital and NML Capital.   Continuación...