President Macri wants ‘reasonable agreement’ with creditors in US courts
By Charles Newbery
BUENOS AIRES, Argentina – President Mauricio Macri said Tuesday that he would seek a “reasonable agreement” in a bid to complete a settlement on a $100 billion default from 2001.
“We want to stop being billed as a defaulting country,” Macri said in a televised press conference. “It is very important that we solve the problems of the past.”
Argentina will start negotiations Wednesday in New York to settle more than $1.3 billion owed to creditors who won a U.S. court case to be repaid in full on the defaulted bonds. Creditors include NML Capital, a hedge fund of U.S. billionaire Paul Singer.
The previous government of Cristina Fernandez de Kirchner, in power from 2007 – 2015, refused to pay the debt in full, saying creditors should accept the same terms as the 92.4 percent of creditors who participated in 2005 and 2010 restructuring offers. Those creditors accepted about 30 cents on the dollar.
The default and court case has prevented Argentina from borrowing on global credit markets.
“We are about to find a solution,” Macri said.
The first move for Macri’s government, which assumed power last month, will be a meeting in New York with Daniel Pollack, who was appointed by U.S. District Court Judge Thomas Griesa to mediate the case. Macri has sent his Secretary of Finance Luis Caputo for the talks.
“Tomorrow we are going to tell the mediator that there has been a change,” Macri said. “Argentina is seeking to recover its good relations with the world.”
The president said the default has put limits on the country’s growth potential.
Without access to international financial markets, Argentina has had to rely on tax revenue, local bond sales, printing money and tapping into foreign reserves to keep on top of debt payments and finance the state.
The measures have drained the country of dollar reserves and pushed it into economic stagnation since 2011 with double-digit inflation.
By ending the default, borrowing costs will come down for doing business in Argentina, helping to increase investment and the offer of goods to reduce inflation that now stands at 25 percent.
“The more predictable we show the country to be, the more factories will set up in Argentina and there will be more jobs for us,” Macri said.