Argentina Finally Makes An Offer Worth Listening To

With hours until the country could default, Argentine leaders negotiating in New York City are finally putting together something of an attractive deal.

Here's how it all started going down: Last night Argentine Economy Minister Axel Kicillof flew in from Caracas for last ditch negotiations with the Special Master of the Court. Around 11:20 EST he left the meeting saying negotiations are ongoing.

What he wants is a stay on a payment to bondholders due at the end of the day Wednesday, marking the end of a decades-long dispute with a group of hedge fund managers, known collectively as NML Capital.

For years it refused to pay these investors over $1.3 billion in sovereign debt.

The country's leaders reasoned that because they would not take a haircut on the debt they purchased after Argentina's last default in 2001 like 90% of holders of they same debt, they were "vultures."

So the "vultures" sued the country all the way to the Supreme Court and won. Now they must be paid like all the other bondholders. By the end of today.

Unless there's a stay on payment until 2015 (like Argentina wants), of course.

This morning, a group of Argentine bankers announced that they would try to sweeten the pot. After years of arguing and appealing, the Court has little confidence in Argentina, and has so far rejected its requests for a stay on payment.

The bankers said that they would put up $250 million as collateral - a show of good faith - to satisfy the Court and NML as negotiations went on. Argentina's leaders have said that if NML is paid 100 cents on the dollar for their investment before 2015, it will trigger a clause in their contract - the RUFO, or Rights Upon Future Offers, clause.

It basically says that if Argentina gives some bondholders - in this case NML - a better deal, other bondholders of the same debt can claim the same terms. Argentina says that could cost the country $15 billion.

But default could cost the country even more. If no payment is made by the end of the day, bondholders can sue for an acceleration of payment. That means Argentina would have to shell out everything they're owed at once - about $29 billion (about everything Argentina has in its Central Bank).

Another option on the table, according to Bloomberg, is for Argentine banks to buy the country's debt from NML and then ask the Court to suspend payment until 2015.

Here's Kicillof entering negotiations around 10 am EST. Let the games begin.

Kicillof enters building w/ rest of #Argentina delegation. Says nothing but 'con permiso' #GrieFault pic.twitter.com/IQG4FXZU6Q

- Luc Cohen (@cohenluc) July 30, 2014