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US Group Asks Argentina To Pay Debt On Default Anniversary
Dow Jones
December 05, 2006

BUENOS AIRES (Dow Jones)--A group of U.S. holders of Argentine distressed bonds Tuesday marked the fifth anniversary of Argentina's default by renewing calls for President Nestor Kirchner to honor his country's debt obligation.

"It is clear that following the last three years of historically strong growth and national reserves of more than $28 billion, Argentina can afford to meet its obligations," American Task Force Argentina said in a statement.

"President Kirchner should give the global investment community a reason to take another look at Argentina," added ATFA Co-Chairman Robert Shapiro.

The Argentine government defaulted on its $100 billion in sovereign debt between 2001 and 2002, and in 2005 it partly restructured the outstanding debt by offering a swap that reimbursed about 27% of the bonds' original value.

Argentina's swap offer was accepted by 76% of the bondholders, leaving those who opted out empty-handed.

Quoting recent analysis, ATFA said that the default and subsequent restructuring cost investors and governments worldwide about $140 billion. More than $20 billion in bonds remain outstanding.

Since its default, Argentina has enjoyed a four-year economic rebound, with growth of more than 8% a year.

During this period, the government has repaid its debt with the International Monetary Fund and built up its monetary reserves to more than $30 billion. Despite the fact that these reserves would be enough to repay its outstanding debt, the government has so far expressed no intention to pay back individual bondholders.

However, it has reportedly proposed to pay debt owed to Spain in advance of honoring debts owed to other Paris Club creditor nations, in a move that ATFA has denounced as a violation of Paris Club rules.

Moreover, ATFA said that as part of its international effort, co-chairman Shapiro conferred with Italian government and business leaders in Rome last month, discussing the importance of multi-national collaboration in pursuing an equitable restructuring and repayment of the so-called Argentine "Tango Bonds."

As a result of this coordination, the Italian parliament committed to pursue a more favorable restructuring of Argentina's outstanding sovereign debt.

"The Italian parliament's new efforts to seek Argentina's return to the negotiating table should be applauded and echoed by all countries affected by Argentina's take-it-or-leave-it restructuring offer," said Shapiro.

"We hope that the engagement of Italy and other governments will compel President Kirchner to make a good faith effort to resolve this issue," he said.

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