GO
Loading...

Argentine banks to offer to buy debt owned by holdout investors suing country in bid to avert default: Report

Protesters, holding a mock vulture, rally against layoffs in front of the factory of U.S. automotive supplier Lear on the outskirts of Buenos Aires July 30, 2014. The protesters were also demonstrating against holdout investors locked in a legal battle with Argentina that could trigger a debt default by the country this week.
Enrique Marcarian | Reuters
Protesters, holding a mock vulture, rally against layoffs in front of the factory of U.S. automotive supplier Lear on the outskirts of Buenos Aires July 30, 2014. The protesters were also demonstrating against holdout investors locked in a legal battle with Argentina that could trigger a debt default by the country this week.

A consortium of Argentine banks is set to offer to buy out the country's debt held by holdout investors suing Argentina, in an eleventh-hour deal aimed at averting a default, a senior banking executive familiar with the offer told Reuters on Wednesday.

The executive said there had not yet been any discussions with the New York hedge funds leading the litigation and that the offer would require them to take a haircut.

"The idea is to sit down with the funds and buy all their debt. We have to negotiate the final amount, the terms and how payment will be made," the executive told Reuters.

The Argentine holdout creditors' lawyer discussed the terms at the mediator's office in New York on Wednesday, a Reuters witness said. The nation's economy minister, Axel Kicillof, also attended the meeting.

The holdout funds are demanding demand full repayment on bonds they bought at a discounted rate after the country last defaulted in 2002.

Read MoreArgentina faces 'shock' if it defaults: Debt pro

—By Reuters

Contact World Economy

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    › Learn More*