By Nicole Hong
Argentine bonds extended their decline on Friday, falling to a seven-week low as discussions to help pull Argentina out of default appeared to remain at a standstill.
The country's dollar bonds due 2033, which were among the ones in default, fell to 81.5 cents on the dollar early Friday, their weakest level since June 27, traders said. They are down from 82.5 cents Thursday. The yield rose to 11.03% from 10.81%; bond yields rise when prices fall.
These bonds have fallen nearly 6% this week as hopes have faded for a quick resolution to Argentina's default. Still, bond prices haven't yet collapsed, as they were trading as low as 74 cents on the dollar in mid-June.
Several U.S. and Argentine banks had been in discussions to help Argentina pay off the debt itowes to its holdout creditors. But one of the holdout creditors, Aurelius Capital Management LP, said on Wednesday none of these proposals were "remotely acceptable" and that there is "no realistic prospect" its debt dispute with the Argentina government can be resolved with a private-sector solution.
Argentina defaulted on some of its bonds on July 30, after it missed an approximate $539 million interest payment due to its restructured bondholders. A U.S. District Judge has ruled that Argentina can't pay its restructured bondholders until it pays the holdouts, which are a group of hedge funds suing the country for full payment on bonds it defaulted on in 2001.
Argentina has argued that it isn't in default because it deposited with Bank of New York Mellon the money necessary for the interest payment on June 26. However, BNY Mellon hasn't yet passed the money along to bondholders because the U.S. judge also warned that any bank who helps Argentina process the payment would be violating a U.S. court order.
Write to Nicole Hong at email@example.com
(END) Dow Jones Newswires
August 15, 2014 10:20 ET (14:20 GMT)
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