Purchase of Argentina debt becomes difficult for banks

International banks are having difficulty to reach a deal to buy part of Argentina’s sovereign debt that is held by hedge funds, which sued the country.

Citi, Deutsche Bank, HSBC and JP Morgan are talking with the funds to help Argentina coming out soon from its second default in just over a decade, which was the result of a long legal dispute with creditors called “holdout”.

Last week, Banks offered 40 cents per dollar of the nearly 1,660 million in holdout bonds, including interests. Then, the offer rose 50 cents on Monday.

Hedge funds led by Aurelius Capital and NML Capital, who bought Argentine bonds cheaply in the crisis of 2001 and 2002, require the payment of the debt plus interests.