Argentina might consider deal with holdout bondholders

Argentina said on Thursday that it might consider negotiating a deal with holdout bondholders who had earlier refused restructuring deals stemming from its 2001-02 sovereign default and had taken the country to US courts, Reuters reported.

The US Supreme Court is set to decide on 12 June whether to take up the country's case appealing against lower court rulings ordering full pay back of the holdout bondholders.

"We have one last instance in order to end this process of debt restructuring, be it by judicial path or by the path of a voluntary agreement," cabinet chief Jorge Capitanich told a regular news conference on Thursday morning.

Earlier on Thursday, Argentina signed a landmark deal with the Paris Club of wealthy creditor nations over repayment of its overdue debt amounting to nearly $10 billion.

A resolution of the case with the bondholders would set aside the last hurdle to the country regaining full access to international credit markets.

In the event of the US Supreme Court declining to hear the case, lower court rulings ordering the Argentine government to pay the so-called holdout creditors $1.33 billion would be left intact.

The latest move by the South American country to settle debt disputes, according to analysts, formed part of a strategy aimed at eventually tapping outside financing.

According to the Argentine government, it would repay the Paris Club over five years, with the first payment for $650 million due this July, followed by $500 million in May 2015, The Wall Street Journal reports.

According to The Paris Club, export credit agencies of its member countries could resume business with Argentina.

According to Sebastian Vargas, a senior economist at Barclays Capita, it showed Argentina was pursuing more creditor friendly policies, which certainly had to be positive for access to financing and foreign direct investment.

The Paris Club deal comes weeks following the government of Argentina giving Spanish oil company Repsol SA around $5 billion in government bonds by way of compensation for the expropriation of a controlling stake in its local subsidiary two years ago.

Last year, the government also settled lawsuits brought by foreign companies hit by the country's 2001 economic crisis paying $500 million.

Jorge Capitanich, president Cristina Kirchner's chief of staff, said in a news conference that Argentina has restructured its debts without causing economic hardship to its people.