ARGENTINA is considering making an initial payment to “holdout” creditors before asking to extend negotiations to officially reach a settlement next January to avert a disastrous debt default, a leading local newspaper said late Sunday.

    Argentina has been locked for more than a decade in a fight in U.S. courts with creditors who refuse to accept a 2005 and 2010 revamp of debt securities and demand to be repaid in full.

    La Nacion newspaper cited unnamed government officials as saying President Cristina Fernandez was considering paying these holdout creditors between US$300 million and US$400 million as a sign of good faith.

    “The initial sum would be equivalent to a 65 percent reduction compared with what was paid to restructured bondholders who entered the 2005 and 2010 swaps,” La Nacion quoted a government official as saying.

    The Argentine Government would then seek to extend negotiations and in 2015 to clinch a payment deal in the form of long-term bonds, similar to deals reached with the Paris Club or Spain’s Repsol, the paper added. (SD-Agencies)