The
sovereign debt crisis in Argentina continues with no resolution in sight and a deadline
looming. Aurelius Capital Management, one of the lead holdout creditors seeking
to settle with Argentina over sovereign debt payments from its 2002 default,
said on Monday the government faces a new crisis on July 30 unless it engages
in serious negotiations.
Argentine officials and the holdout investors met separately
with a court-appointed mediator on Friday, emerging from his offices after five
hours of discussions with no resolution and no further talks scheduled.
In 2012, U.S. District Judge Thomas Griesa in New York
awarded the holdouts $1.33 billion plus accrued interest in a case based upon
the pari passu, or equal treatment, clause used to sell the bonds originally in
1994.
Argentina continues to request a stay, or suspension, of
Griesa's judgments while talks continue. That would give the nation more time
beyond a July 30 deadline for a coupon payment to bondholders who agreed to two
prior restructurings in 2005 and 2010.
Without a deal, Latin America's No. 3 economy risks tumbling
into a new default as it battles a recession, one of the world's highest
inflation rates and dwindling foreign reserves.
The holdouts have said they would discuss an accommodation
to let the government pay the other bondholders facing potential default if
negotiations to settle the legal dispute have made good progress before July
30. But they also argued to Griesa that there were no grounds for granting a
stay.
Buenos Aires said in a statement on Friday that a stay is
"essential" given the size of the claims, and that it was willing to
continue talks but did not specify if it would or when. It has also argued that
it is being pushed into default by the holdouts.