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Argentina settles battle over bonds worth $95bn Argentina settles 15-year battle over bonds worth $95bn
(about 1 hour later)
Argentina has signed an agreement with US hedge funds to settle a protracted dispute over its failure to repay $95bn worth of bonds.Argentina has signed an agreement with US hedge funds to settle a protracted dispute over its failure to repay $95bn worth of bonds.
Argentina will pay Elliott Management and others who sued Argentina about $4.6bn to settle all claims. It will pay the funds who sued the nation about $4.6bn to settle claims.
They had bought the bonds at heavily discounted prices after the country's economy collapsed in 2001.
The previous government of President Cristina Fernandez de Kirchner, refused to negotiate with the investors, labelling them "vulture funds".
The agreement is a victory for Mauricio Macri, who was sworn in as Argentina's president in December.The agreement is a victory for Mauricio Macri, who was sworn in as Argentina's president in December.
He reversed the non-payment stance taken by his predecessor, Cristina Fernandez de Kirchner. He reversed the non-payment stance taken by his predecessor.
Analysis: Veronica Smink
If Argentina finalizes a deal with hostile funds NML and Aurelius Capital it would force the remaining holdouts to negotiate and could mean the end of a 15 year battle that turned the country into a pariah of the international markets.
While its Latin American neighbours have had access to credit at around 5% interest rates, Argentina had been forced till now to pay at least double, leaving the country without much needed financial help.
An agreement would also pave the way for future international investment, as it would create confidence in the country and it's adherence to the rule of law.
But the deal will also have a political cost for president Mauricio Macri, as the fight against the "vulture funds" -as they are called locally- is considered a matter of national pride by many, who applauded previous president Cristina Kirchner's stand against them.
The creditors were led by hedge funds NML Capital and Aurelius Capital Management.
Daniel Pollack, the court-appointed mediator, said: "It gives me greatest pleasure to announce that the 15-year pitched battle between the Republic of Argentina and Elliott Management, led by Paul Singer, is now well on its way to being resolved."Daniel Pollack, the court-appointed mediator, said: "It gives me greatest pleasure to announce that the 15-year pitched battle between the Republic of Argentina and Elliott Management, led by Paul Singer, is now well on its way to being resolved."
The long-standing dispute has restricted the country's access to international credit markets.The long-standing dispute has restricted the country's access to international credit markets.
The investors bought the bonds at heavily discounted rates after the country's economy collapsed in 2002. After the announcement was made the Buenos Aires Stock Exchange's benchmark Merval Index was up by 3%.