(Adds stock market and currency reaction, byline, context, statement from cabinet chief)
By Walter Bianchi
BUENOS AIRES, June 23 (Reuters) - Argentine financial markets shot higher on Monday as the government got set to negotiate with investors who refused to restructure their bonds after the country’s 2002 sovereign default.
Economy Minister Axel Kicillof was expected to speak later in the day in Buenos Aires about Argentina’s opening position in talks to be held in New York with “holdout” creditors who are suing for full repayment.
A hearing could be held as early as Monday in the chambers of U.S. federal judge Thomas Griesa. Local markets were closed on Friday, when President Cristina Fernandez reversed her long-held policy of shunning negotiations with the holdouts.
Argentine over-the-counter bonds rose 5.3 percent when the market opened on Monday while the benchmark Merval stock index jumped 6.15 percent. The local peso currency opened 6.4 percent stronger on Monday at 11.7 per U.S. dollar on the black market.
“Economy Minister Kicillof will let the public know about the presentation to be given by Argentina’s lawyers,” cabinet chief Jorge Capitanich told reporters while speculation swirled about a government mission being sent to New York to help make Argentina’s case.
The country is locked in a 12-year-old legal fight with creditors who refused to accept a 2005 and 2010 revamp of debt securities. More than 90 percent of Argentina’s bondholders accepted the restructurings, which left them with less than a third of the original value of their bonds.
But the holdouts have won a series of U.S. court rulings that have brought Argentina to the verge of a new default.
Until Friday Fernandez had refused to negotiate with the holdouts, portraying them as “vultures” out to exploit Argentina’s 2002 debt crisis, which thrust millions of middle-class Argentines into poverty.
Judge Griesa, of U.S. District Court in New York, has issued a ruling that bars the government from paying the holders of its restructured debt unless it also pays the holdouts.
The next payment on restructured debt is due June 30. If Argentina does not make that payment on time, it would have a 30-day grace period before falling into technical default. (Writing by Hugh Bronstein; Editing by Meredith Mazzilli)