By Nate Raymond
Argentina has reached a deal with lawyers pursuing a US class action lawsuit over defaulted debt to resolve the case, as part of the country's efforts to settle long-running litigation over its 2002 default, a court-appointed mediator says.
Daniel Pollack, a New York lawyer overseeing the settlement talks, said the agreement in principle "fit within the numerics" of Argentina's proposed offer earlier this month to resolve various lawsuits by holders of defaulted bonds.
Exactly how many bondholders are covered by the class action settlement would be known in several weeks, Pollack said. Those who do participate would receive 100 per cent of the principal owed and 50 percent of the interest on that principal, he said.
Pollack said the deal was conditioned on the approval of the Argentine Congress and the lifting of injunctions issued by US District Judge Thomas Griesa in the litigation.
He added he was "hopeful that there will be more settlements to come".
Jason Zweig, a lawyer for the plaintiffs, said he was pleased Argentina had "decided to put this matter behind them".
"This shows that the proposal is good and that we are continuing to advance positively. We hope that there will be more agreements in the coming days," said a source in the Argentine finance ministry.
The deal came after Argentina, headed by President Mauricio Macri, on February 5 proposed paying US$6.5 billion to settle litigation stemming from its record US$100 billion default in 2002.
Two out of six leading bondholders pursuing have already accepted the offer, Pollack has said.
The offer represents a 27.5 percent to 30 percent discount for creditors who filed claims of about US$9 billion.
But Elliott Management's NML Capital Ltd and Aurelius Capital Management LP, among the leading creditors pursuing individual lawsuits in the dispute, have not accepted the offer.