News Center

Adjusting details with Barclays to launch the swap this week
Perfil
April 11, 2010

Between Wednesday and Thursday the offer to the bondholders in default will come out. High acceptance is expected and with it the possibility that Argentina goes back to selling debt abroad. Paris Club in view.

by Rodolfo Barros y M.E.

Between Wednesday and Thursday, the return of Argentina will be defined in international finance. Economists and analysts are looking at the swap of debt in default, for which the government will try to reprogram and reduce the US$20 billion in bonds that didn't enter the 2005 operation, as a fact and its acceptance level will be high.

It will be successful, they agree, while pointing out that the return of Argentina to the international markets doesn't solve the problems at the heart of the domestic economy and the possibility of taking on debt abroad will depend on the health of fiscal accounts.

"At the time of seeking money, the government will have to show to the funds that their accounts are in order and that is not so clear," said various people consulted that recalled that the swap is not the remedy for all that ails Argentina, like inflation.

Yesterday, Economy Minister Amado Boudou shared in New York the final details of the offer with executives of Barclays that will determine, among other things, how much the haircut will be that will be accorded the holdouts. The conditions could change again before the formal launch, in function of what happens on the international markets.

On Saturday, Boudou said that the reopening of the swap will generate "a strong flow of investments to the productive sector that will allow the creation of quality employment."

"The embargo was a surprise," said ex-Finance Secretary, Daniel Marx, recalling the measure taken by Judge Thomas Griesa last week, which held up Central Bank accounts abroad at the request of the vulture funds. Equally, he said that the majority of bondholders will enter the swap.

For Marx, "if Argentina does normal things there would be a better horizon for direct investment and businesses and people would take more risk and make more funds available."

Meanwhile, President Cristina Kirchner visited the Smithsonian Institution in Washington and the National Museum of the American Indian after meeting on Saturday (sic) with 200 executives of U.S. businesses with interests in Argentina, to whom she explained the aspects of the operation.

"The majority don't understand why Argentina has so many problems. The world is difficult, but our country shouldn't have so many problems. If it begins to do normal things it would be advantageous," Marx added about the mood of the bondholders.

Asked about if a broad acceptance of the swap could diminish the chances of embargoes, Marx explained that there is a group of bondholders that continues to sue and could be improving their negotiating power. "It's less cash to wipe a stain clean, and those who provoked the stain think that now they can be paid. Before it was out of reach. Argentina could consolidate debt taking advantage of the majority accepting the conditions. It's a diplomatic-financial-legal move that it could make," he explained.

After the swap, Boudou will continue the negotiations with the Paris Club, which has a balance of some US$6.1 billion.

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

Resolution on Argentina's Generalized System of Preferences Status (GSP)

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.