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Boudou admits that the swap could be prolonged
El Cronista
June 18, 2010

In an interview with El Cronista, the minister put forth that he could extend the deadline "if things go well." And said that the scenario is favorable. They are hoping for 60% adhesion.

NATALIA DONATO Buenos Aires

Four days from the deadline set by the Economy Ministry to close the debt swap, Minister Amado Boudou yesterday left open the possibility of announcing a new extension, as the market has been speculating.

While Finance Secretary Hernan Lorenzino had dismissed it for thinking that "things are going well", the head of the economic team told El Cronista that "if the situation advances favorably, the deadline could be extended."

"If it goes well, it is extended. If not, we close it now," Boudou said, when asked by this newspaper in the hallways of the Economy Ministry. Then he emphasized that the road show which ended yesterday in Italy was positive and that the scenario for acceptance of the operation is favorable, for which by implication of his own statements infers that there could be a new postponement of the slowe of the swap.

Until now, of the US$18.3 billion in default, US$9.9 billion have entered, or 54%. This number is below the 60% that Economy wanted and there are only three business days left to reach, as a minimum, this percentage. For that, it would be logical to extend the deadline once again. Anyway, it will not be communicated until the last minute to avoid having bondholders who had expected to enter to decide to wait some days.

Of the US$9.9 billion in the hands of institutional investors, US$8.5 billion entered during the first round, set up for large holders, which the rest corresponds to small bondholders. The swap would have initially closed on June 7th, but the government decided to extend it until the 22nd to managed to capture more creditors. It's for this that the officials at Economy traveled to Italy and Japan to try to captivate them with the offer.

Acceptance in the Asian country was total, while in Italy there is still a large number of bondholders that didn't enter. Of the US$4 billion in bonds in the hands of small investors, US$3 billion is with Italian holders.

Boudou led the tour, but then returned to Buenos Aires and left Lorenzino and Finance Undersecretary Adrian Cosentino in charge of the mission. Both will return during the day today to the country.

After meeting with banks and businessmen, the Finance Secretary assured that the acceptance level in Italy and Japan is very high and ratified his confidence in reaching the set goal. Official sources said that in the last two weeks, on average, US$100 million in bonds in default entered the swap daily.

Next Tuesday, Minister Amado Boudou will leave for Canada to participate in the G-20 Summit that will be held in the city of Toronto.

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