Argentina’s banking association members are working on a last-minute plan to help the nation avert a debt default, Wall Street Journal reported Wednesday, citing people familiar with the matter.
The association’s plan, which is yet to be completely hashed out among the banks, will entail buying the legal claim and paying off the holdout creditors who are suing Argentina in US courts for full payment on bonds the country defaulted on in 2001, the report said.
In exchange, the banks will ask the holdouts to ask US District Judge Thomas Griesa, whose ruling has barred Argentina from paying its restructured bondholders unless it pays off the holdouts, to suspend his ruling, it said.
A source was quoted as saying that the idea is for the banks to buy the government’s claim in three cash installments. In exchange, the banks will ask the government to pay them back in bonds beginning in January, when a key clause in the case expires.
Argentina’s economy minister said late Tuesday that the nation will continue negotiations with holdout investors after failing to reach a deal during a full day of talks. Argentina needs to reach a deal with the investors by Wednesday to prevent a default, which would be its second this century.
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