(MENAFN- AFP) Hedge funds locked in a long US court battle with Argentina over defaulted bonds are still hoping for negotiations for payment, a group tied to the funds said Tuesday.
"There are no negotiations occurring now," said Robert Shapiro of American Task Force Argentina, an activist organization sponsored by the hedge funds.
"We always hoped that this government would negotiate, and we continue to hope that reason will prevail even in this government and they will sit down and negotiate," Shapiro told journalists.
The two funds' fight with Buenos Aires to be paid $1.3 billion in principal plus additional penalties on bonds they hold has been quiet since December, after more than two years of constant public wrangling and repeated hearings in a New York court.
Last year Argentina lost its battle against the court's order to pay the two, Aurelius Capital Management and NML Capital, and subsequently opted to default again on other debts rather than give money to what it labels "vulture funds".
The two hedge funds refused to join restructuring of the nearly $100 billion in debt that Argentina defaulted on in 2001 -- in which most bondholders accepted losses of up to 70 cents on the dollar -- and have held out for full payment on the bonds.
Argentina has argued that the two bought the bonds speculatively at deep discounts with the intent of suing to be paid full face value.
It has also said that honoring the demands of holdouts puts at risk sovereign debt restructurings generally.
But the New York court that heard the case ruled the two funds have valid claims and that Argentina would have to pay them in full when it makes any other debt payments.
Refusing to do so, the country fell into default on most of its debt in July.
Expectations were that after a key debt contract clause on equal payment for all creditors expired at the beginning of the year, Buenos Aires would negotiate a settlement with the two.
But Shapiro said nothing was happening, even though a court-appointed mediator was available for discussions.
"Our members have tried repeatedly in this period to negotiate with representatives of the government and have been repeatedly rebuffed," he said.
"So we continue to welcome the arbitrator's efforts and continue to hope that the Argentine government will put the economic interest of its people first and sit down and negotiate."
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