Argentina in late bid to avoid default

Cabinet chief Jorge Capitanich said an Argentine delegation was be in New York yesterday to meet a court-appointed mediator, just a day ahead of the deadline.

“Argentina’s position is to reach a dialogue that establishes fair, legal and sustainable conditions for negotiation with 100 per cent of the bondholders,” Mr Capitanich said.

But the mediator, Daniel Pollack, said while the Argentines would meet him, they had not yet accepted his recommendation of face-to-face talks with the plaintiffs in the dispute, led by New York billionaire Paul Singer’s NML Capital.

Those creditors bought Argentine bonds on the cheap and rejected the government’s restructuring offers following its record $100bn (£59bn) default in 2001. They are demanding payment in full of some $1.5bn (£887m) in unpaid debts.

By today, Argentina has to make a payment to other creditors who accepted the restructured bonds or fall into default. But US District Judge Thomas Griesa has forbidden Argentina from paying them unless it also pays the hold-outs.

In June he ordered Bank of New York Mellon to return to Argentina $539m (£319m) it had deposited to pay holders of restructured debt.

Argentina’s Economy Ministry said the government had made a $642m (£380m) payment on debt owed to creditor nations, the first instalment in a deal it reached with them in late May for repaying a total of $9.7bn (£5.7bn).