Bloomberg News

Argentine Bonds Rally With Stocks as Mediator Meeting Extended

July 29, 2014

Argentina's Finance Secretary Pablo Lopez

Pablo Lopez, Argentina's finance secretary, speaks to the media while exiting after debt talks in New York, on July 24, 2014. Photographer: Peter Foley/Bloomberg

Argentina’s stocks and bonds rallied on speculation the government is moving closer to reaching an accord to avert default as a meeting with a court-appointed mediator extended into the early evening.

Argentina’s benchmark Merval (MERVAL) stock index jumped 6.5 percent, after earlier losing as much as 1.1 percent, to close at the highest since June 23. Argentine bonds due 2033 rose 0.35 cent to 84.22 cents on the dollar at 5:50 p.m. in Buenos Aires, erasing earlier losses.

An Argentine delegation led by Finance Secretary Pablo Lopez took a break after meeting with court-appointed mediator Daniel Pollack for about five hours and will resume talks this afternoon, state-run news agency Telam reported, citing a person close to the talks who it didn’t identify. U.S. District Court Judge Thomas Griesa blocked a debt payment due June 30 because the country didn’t comply with a court ruling that ordered it to pay defaulted bonds at the same time. A grace period expires tomorrow.

“If they resume the meeting, it must be because they have something to talk about,” said Guillermo Mondino, an emerging-markets economist at Citigroup Inc. “It’s remarkable how the market reads a break in a meeting.”

Officials arrived at the Manhattan office at 11:15 a.m.

In the four previous meetings they’ve held with Pollack, Argentine officials have asked for the court to delay the ruling until January and for holdouts to offer protection against a clause that prohibits the nation from sweetening the deal to holdouts without making the same offer to exchange bondholders.

The government has thus far rejected direct talks with holdouts as urged by Pollack. The last meeting lasted just one hour.

Holders of Argentine Euro bonds filed an emergency request to halt litigation over the South American nation’s defaulted bonds, citing an agreement by some debt-holders to waive a key clause as justification to allow settlement talks extra time.

On June 16 the U.S. Supreme Court left intact an order for Argentina to pay holders of defaulted bonds including Elliott Management Corp. about $1.5 billion whenever it pays restructured debt.

To contact the reporters on this story: Camila Russo in Buenos Aires at crusso15@bloomberg.net; Katia Porzecanski in New York at kporzecansk1@bloomberg.net

To contact the editors responsible for this story: Brendan Walsh at bwalsh8@bloomberg.net Daniel Cancel


Video Game Avenger
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus