NEW YORK - A U.S. judge ordered Argentina and investors who did not participate in the country's past debt restructurings to meet "continuously" with a court-appointed mediator until a settlement is reached, warning of the threat of a new default.
U.S. District Judge Thomas Griesa in New York told Argentina and lawyers for investors who declined to restructure their bonds after the country defaulted on about $100 billion in 2002 that time was running out to reach a deal and avert a fresh default.
"That is about the worst thing I can envision. I don't want that to happen," the judge said.
Jonathan Blackman, a lawyer for Argentina, Latin America's No. 3 economy, said even with around-the-clock talks, it would be "unlikely if not impossible to result in settlement."
"It simply can't be done by the end of the month," he said.
Griesa ordered the parties to meet with Daniel Pollack, a New York lawyer appointed to oversee settlement talks, "continuously until a settlement is reached." Pollack scheduled a meeting Wednesday at 10 a.m. EDT (1400 GMT).
Pollack, who was appointed June 23 as a mediator, has been holding meetings with the parties, publicly acknowledging talking twice with Argentine officials.
Argentina's over-the-counter dollar-denominated bonds slid following the hearing, reversing earlier gains. The bid price on the Discount bond was down 3.3 percent on the previous day at $84.90 at 1508 local time (1808 GMT) while the Par bond fell 4.8 percent at $48.75.
"It's probably Argentina's apparently rigid position, insisting it cannot do anything in July, rather than Griesa's response, that is weighing on markets," said Alejo Costa, head of strategy at investment bank Puente.
Argentina has been pushed to the brink of a fresh debt default by U.S. court decisions that it pay $1.33 billion plus interest to bondholders who did not participate in debt swaps in 2005 and 2010. The holdouts are led by Elliott Management's NML Capital Ltd and Aurelius Capital Management.
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