News Center

US bondholders reject debt swap
AFP/Rio Negro
January 08, 2010

Say the proposal is "unacceptable." Redrado's exit could complicate the situation.

WASHINGTON.- The conditions of the new debt swap proposed by Argentina are "unacceptable" and will not solve the problem pending since the default of 2001, said yesterday the president of an association of bondholders in the United States, Robert Shapiro.

This is the first public opinion of an association of holders of Argentine bonds that came out to reject the official proposal of this new swap. The Argentine government, which obtained Congressional approval to swap US$20 billion in pending bonds, is preparing an offer that should be presented shortly, in the city of New York, according to media reports in Buenos Aires.

"After five years, the Kirchners are proposing an offer that is not better than the one that provoked the crisis," said Shapiro in an interview with AFP.

The Argentine offer, administered by three international banks Barclays, Citi and Deutsche Bank, could interest the investment funds that bought bonds after the crisis. "For them, the offer is good in the sense that they bought repudiated debt at heavy discounts," said Shapiro, who plans to travel to Europe again to present his point of view to the authorities and political sectors.

The Argentina Task Force, which represents close to 30 associations and thousands of small American investors, is seeking to pass a law in Congress that indefinitely prohibits access to its markets by countries in default. Shapiro didn't want to comment on the current crisis between the Kirchner government and the ex-president of the Central Bank, Martin Redrado. However, "the bridge" between most of the holders of bonds in default and the Argentine government was guaranteed before traders by the ex-head of the Central Bank.

Awaiting approval

The national government will, in the coming hours, go before the Securities and Exchange Commission (SEC) of the United States, with the prospectus of the swap offer for bondholders that didn't enter the swap in 2005.

Should the U.S. organization approve the proposal without legal or technical questions, the government will be about to initiate the operation in the final week of January. At the same time will begin the "road show" that Economy Minister Amado Boudou, together with Finance Secretary Hernan Lorenzino, and his second in command, Adri n Cosentino, will take to Japan, the United States and Europe.

Argentina would give a Discount bond for the defaulted titles and a Par bond for the expired interest for large investors at a term of seven years, and for the smaller investors at three years. And the operation will include payment for the coupon attached to GDP in 2008, but it remains to be decided if it will include payment for corresponding interest for the period of 2005-2007.

The adhesion of this sector is key for the Casa Rosada because it is upon them for the swap to be considered successful. In that sense, the banks charged with presenting the offers to the creditors have already assured a level of acceptance of 50%.

U.S. Government
Takes Action

Click here to view letters by the Administration and Members of Congress on Argentina's debt and economic policies.

The Debt and Europe

Click Here To Read More

ATFA Member Spotlight

National Taxpayer's Union

Open Letter to the U.S. House of Representatives: Protect Taxpayers from Judgment-Evading Nations

Click here to view other ATFA member activity

Join Us
Show your support for ATFA and our work regarding debt default by joining our growing list of supporters.

Tell Your Friends
Do you have friends or colleagues who would be interested in supporting ATFA? Send them an invitation to this site by clicking here.