Argentina has come to an agreement to pay a group of holdout hedge fund creditors who invested in the country after its economic collapse in 2001.
The holdouts, led by Elliott Management's Paul Singer, will get 75% of their judgments — $4.65 billion — plus a payment for legal fees.
Argentina will get a new lease on life after over a decade of fighting in court. It will finally be allowed to tap into international credit markets again, which it needs to battle a growing fiscal deficit that has dangerously lowered its cash reserves.
The deal is subject to approval from Argentina's congress.
“We are pleased to have reached an agreement with Argentina. We are hopeful that the completed negotiations, held under the aegis of Special Master Daniel Pollack, have cleared the way for other plaintiffs to reach satisfactory resolutions as well," said a spokesperson for Elliott Management.
Cristina
This was a saga for the ages. The holdouts were known by those in Argentina as "vulture" funds. As president, Cristina Fernandez de Kirchner made a refusal to pay them a political issue — a battle between North American aggressors trying to control the countries in South America.
At one point in 2012, a Ghanaian court impounded an Argentine naval vessel as collateral for the hedge funds. It was crazy. Things got so intense that Argentina actually defaulted on its debt again in the summer of 2014.
Then Mauricio Macri was elected to the presidency in November after promising economic reform and liberalization. He set about negotiating with the holdouts.
That isn't to say all of that went smoothly. There were definitely times when the holdouts felt as if Argentina might be trying to give them the slip. Just last week, the court's special master publicly scolded the hedge funds' lawyer for disclosing that the parties were close to deal.
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