The creditors that are holding defaulted sovereign bonds against Argentina have agreed to make a deal under $250 million. Daniel Pollack headed the long-running case and made way for a fair mediation.
The Argentinian government together with the Red Pines and Spinnaker are the principal subject of the agreement. Pollack said the government will pay150 percent of the principal bond amount.
This agreement is monumental as this will end the 14-year legal battle against Argentina's debts that obstructed the country's global credit market. According to the Financial Times, the end to Argentina's credit default will be a milestone for President Mauricio Macri who promised to revive his country's struggling economy right after 12 years of the populist regime.
Since being elected, Macri has been quick in settling the debt issue of Argentina with US-based hedge funds that filed a case at the federal court, demandeding a full payment during the year 2002 as per Reuters.
As reported by the Daily Mail, US District Court Judge Thomas Griesa repeatedly ruled against Argentina. He is firm in his decision to let Argentina pay the holdouts before it can pay other creditors. Griesa's decision prohibited the country from accessing international credit markets, forcing them to issue domestic bonds and search for other financing source like China.
Argentina, on the other hand, has been keen in following Griesa's decision in order to lift the injunction. Just last month, the country overturned legal impediments in order to pay its holdout creditors. This will be considered the very last step in order for Argentina to get back into the global market.
According to Pollack, to make the settlement final and binding, the funds should express their support and withdraw their opposition in the Court of Appeals for the injunction to be lifted. The newly issued bonds by Argentina will be paid in cash to its creditors which is worth $12.5 billion and another $3 billion to pay the smaller funds that also sued the country.
