MercoPress. South Atlantic News Agency

Argentina/holdouts impasse remains; delegation back to Buenos Aires for instructions.

Consistent with Judge Griesa’s direction ”I anticipate that there will be further communications with the parties prior to the Default date (July 30)” said Pollack

Argentina failed to reach a breakthrough with the U.S. court-appointed mediator in its battle with holdout creditors in New York on Friday in talks that lasted just an hour. The Argentine delegation is flying back to seek instructions from its government, mediator Daniel Pollack said, while the country's economy ministry underscored it would continue the dialogue with him over the next few days.

 According to first official reports, the reunion lasted no longer that an hour and a half, the shortest of the three mediator Pollack has headed over the week, pushing for a settlement of a 1.3 billion dollar dispute threatening to plunge Argentina into default.

Pollack told reporters that talks at his office in New York were over for Friday and issued the following statement:

“I had a brief follow-up meeting this morning with the delegation from the Republic of Argentina. They will be returning to Buenos Aires tonight to confer with and seek further instructions from their Government.

The Bondholders were not present this morning, but I briefed them subsequently by telephone. They reiterated to me their availability and willingness to meet with me, and, indeed, with representatives of the Republic, at any time.

No resolution of the impasse between the parties has been reached. Consistent with Judge Griesa’s direction of earlier this week in open Court, I anticipate that there will be further communications with the parties prior to the Default date (July 30).”

The Argentine Economy Ministry later released another communiqué saying that “continuing with the dialogue process, we went into detail about the different aspects of the dispute and the possible different alternatives.”

Argentina reiterated its willingness to advance towards a solution in “fair, equal, legal and sustainable conditions” for 100% of bondholders.

“The dialogue process opened with the mediator will continue within the next days,” the statement concluded.

Earlier this week, U.S. District Judge Thomas Griesa ordered Argentina and holdout creditors who have rejected its debt restructurings to meet continuously with Pollack to try to reach a deal and avoid the country's second default in 12 years.

If they fail to reach a deal and holdouts do not ask for a suspension of Griesa's ruling to pay them back in full on their defaulted bonds, the judge will prevent Argentina from making a July 30 deadline for a payment on its exchanged bonds.

The Argentine government portrays the funds as “vultures” picking over the carcass of its default that sent millions of Argentines into poverty. It has refused to talk directly with them.

Griesa ordered in 2012 that Argentina pay the holdouts 1.33 billion plus accrued interest - a ruling Argentina says it cannot comply with

Argentina argues it would open itself up to challenges from creditors amounting to anywhere from 120 billion to 400 billion if it broke the RUFO. The clause expires on Dec. 31.
With just five days until the July 30 deadline, the odds of a default have sharply increased.