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. Last Updated: 07/27/2016

Investors Wary of IMF Deal

BUENOS AIRES, Argentina -- Argentine bondholders, including a group representing 7,000 investors, said they are concerned an accord between the government and the International Monetary Fund won't encourage the nation to restructure $99.4 billion of debt.

"There is no indication whatsoever on what this deal means for the rights of the creditors and the course of the debt renegotiation," Horacio Vazquez, head of the Argentine Bondholders' Association, the country's largest creditor group, said. "There is no reliable information on whether Argentina will finally be compelled to start serious talks."

Argentina on Tuesday agreed to make a $3.1 billion payment to the IMF that the country had threatened to miss. Creditors are disappointed that the fund abandoned an effort to insist that the restructuring be accepted by 80 percent of bondholders.

Argentina's offer to repay investors with new bonds worth $250 per $1,000 face value of defaulted debt has spawned dozens of lawsuits from investors contending that South America's second-largest economy after Brazil can afford more. The United States, the largest shareholder of the IMF, has called on Argentina to move ahead on talks with bondholders.

"We would urge Argentina and the creditors to get together and work it out and urge Argentina to live up to its commitments," U.S. Treasury Secretary John Snow said last week.

Argentine President Nestor Kirchner had threatened to miss the payment unless the IMF agreed to back Argentina's stance on restructuring its defaulted bonds. The IMF agreed to withdraw new demands not included in the original lending accord signed in September, Senator Cristina Kirchner, the president's wife, said at the Senate in Buenos Aires.

The Merval stock index had its biggest gain in 11 months Tuesday and the benchmark bond and currency rose on expectations the government will receive its next loan disbursement from the IMF and move forward on restructuring debt two years after the biggest default in history.