Argentine Finance Secretary Luis Caputo announced that his government will present "between today (Thursday) and tomorrow (Friday)" a proposal to pay the debt owed to holdout creditors, commonly referred to as the vulture fund holders.
“There are many funds, and various credits (involved),” Caputo, an ex-Wall Street insider and former executive at JPMorgan and Deutsche Bank, said in a news conference.
“Agreeing on only one offer is not easy,” he added, explaining why the deal is to be announced one day late.
The debt to vulture fund holders currently reaches a total of about US$9 billion—mainly held by Elliott Management and Aurelius Capital Management, informed U.S. court-appointed mediator Daniel Pollack in a communique issued on Monday, when Argentina resumed negotiations with its creditors in New York.
The pre-agreement with Italian bondholders represents about 15 percent of the debt that was not restructured in previous agreements and 30 percent of the debt currently negotiated in U.S. courts,
On Tuesday, Argentine Minister of Internal Revenue Alfonso Prat Gay announced a pre-agreement had been reached with the Italian funds, including the payment of US$1.35 million in cash—which represents 150 percent of the initial debt owed after Argentina defaulted in 2005 and 2010.
Nevertheless, any deal agreed between President Mauricio Macri's administration and the vulture funds will require a vote in Congress, where the president lacks a majority.
Whether Argentina signed a nondisclosure agreement or not is still unclear. This agreement was proposed by Elliott and Aurelius.
In October, U.S. District Judge Thomas Griesa ruled that Argentina had to treat all bondholders in 15 different lawsuits the same as those who had previously secured a U.S. court ruling for US$1.33 billion in payments from Buenos Aires.
In the past, the Argentine progressive government dismissed similar rulings in U.S. courts on three different occasions, calling them a violation of their sovereignty.
But Macri, elected in November, vowed to reach a negotiated deal with the vultures funds, which include former creditors who refused to participate in Argentina's 2001 debt restructuring.
While most of the country’s creditors at the time agreed to accept the restructuring, a small group has pursued international legal action against the Argentine government.
In July 2014, U.S. Federal Judge Thomas Griesa controversially blocked a deposit of US$539 million from the Argentine government, instead demanding holdout claims be paid in full. Shortly afterwards, Argentina declared a “partial default” despite showing the will and capacity to pay 90 percent of its creditors on a month by month basis.
Since then, Griesa has increased pressure on Argentina by directing international financial firms to not process various payments and blocking a plan to rollover some of the country's debt.
The decision by the U.S. has been widely criticized by regional leaders and the international community. Since the initial ruling, several regional integration blocs have issued statements of support for the Argentine government including the CELAC, the Southern Common Market (Mercosur), the Bolivarian Alliance for the Peoples of Our America or ALBA, the Bank of the South and UNASUR.