Argentina and holdout funds reach agreement

After nearly three months of negotiations, Argentina and the representatives of holdout funds headed by Elliot Management have signed an agreement in principle that puts a 15-year legal battle "well on its way to being resolved," announced Daniel Pollack, special master appointed by the NY court headed by judge Thomas Griesa.

Under the agreement Argentina will pay NML – the fund headed by investor Paul Singer – and several other funds suing the country for an aggregate sum of US$4.65bn to settle all claims, in the Southern District of New York and worldwide.

"The agreement in principle is subject to approval by the Argentine congress and, specifically, the lifting of the lock law and the sovereign payment law, enacted under a previous administration and which would bar such settlements," stated Pollack in a press release.

The agreement would allow the holdout funds managed by Elliott Management, Aurelius Capital, Davidson Kempner and Bracebridge Capital to receive 75% of their full judgments including principal and interest, plus a payment to settle claims outside the Southern District of New York and certain legal fees and expenses incurred over the last 15 years.

In addition the settlement, if consummated, together with prior agreements with other holdout funds "resolves over 85% of the claims of those with 'pari passu' and 'me-too' injunctions," added Pollack.

Argentina has been effectively cut out from international debt markets for over five years as a consequence of the legal standoff with the holdout funds.

(Pictured: Daniel A. Pollack)

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