Argentina to Meet Mediator in Attempt to Avoid Fresh Debt Default

A delegation from Argentina and its holdout creditors will meet a court-appointed mediator again, as the country looks to avoid a fresh debt default with its deadline expiring in a day.

The parties will separately meet the mediator, Daniel Pollack, as Argentina continued to refuse Pollack's demand to hold face-to-face talks.

The Argentine delegation, which includes technical, financial and legal representatives, will meet Pollack at 11:00am EDT in New York.

"I again urged direct, face-to-face conversations with the bondholders, but that will not happen tomorrow," Pollack said earlier.

Earlier, US judge Thomas Griesa ordered Argentina and the holdout creditors who did not take part in the country's debt restructuring in 2002 to meet the mediator "continuously until a settlement is reached".

Despite many rounds of talks, the parties are yet to reach an agreement.

Argentina has been engaged in a long legal battle with hedge funds led by Elliott Management and Aurelius, which refused to take part in the country's debt restructuring. About 92% of the country's creditors agreed to swap debts and accept less money.

In a major blow to the government, Griesa earlier gave a ruling that bars Argentina from paying the holders of its restructured debt unless it pays the hedge funds.

Following the adverse order from Griesa, Argentina claimed that if the country paid the suitors on their terms, it would lead to claims from other holdouts of around $15bn (£8.8bn, €11bn) in debt.

The government's coupon payment to restructured bondholders through a New York bank had earlier been blocked by Griesa. As a result, the country is facing a technical default by the end of July if it does not make a settlement with the so-called "vulture funds".

Meanwhile, Argentina paid the Paris club a first $642m tranche as part of a deal to clear its debts with a number of wealthy creditor nations.

"In this way, Argentina continues its path of resolving the international liabilities produced by the 2001 default," the economy ministry said in a statement.

The country reached a deal with the Paris Club in May, agreed to clear its $9.7bn of arrears stemming from its 2002 default. Argentina will repay the amount in different tranches over the next five years.