September 30, 2014
European creditors seek removal of RUFO clause
European investors holding 5.2 billion dollars of restructured Argentine bonds are negotiating the removal of the Rights Upon Future Options (RUFO) clause that the country claims prevents them from negotiating with vulture funds, sources close to the meetings informed today.
If an agreement is eventually reached, it would represent a major breakthrough following President Cristina Fernández de Kirchner's refusal to pay holdouts that did not accepted the two debt swap alternatives offered in 2005 and 2010.
The government argues it can not propose a better option to so called ‘vulture funds’, due the RUFO clause which prevents giving more benefits to bondholders who did not take part in the previous debt swap processes.
Latham & Watkins attorney, Christopher Clark, who counsels bondholders, said they are working on a request to eliminate the RUFO clause.
“We are working with Deutsche Bank to make progress as fast as we can during negotiations,” he affirmed.