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Confirmed: the debt swap surpassed 67%
Ambito Financiero
July 05, 2010

The adhesion to the debt swap was higher than the 66.4% originally announced and surpassed 67% of the total of US$18.3 billion in bonds subject to the restructuring, according to what the Economy Ministry announced yesterday.

Through a statement, the staff that Amado Boudou leads said that of the bondholders "by an eligible amount of approximately US$12,862,131,347.91 or its equivalent in other currencies have presented offers," of which, approximately US$10 billion have opted for the discount bond and another US$2.657 billion for the Par bond. But of that amount it's necessary to take out the so called "retenders" that are those that already participated in the 2005 swap. Those are US$600 million in bonds for which less bonds entered, around US$12.262 billion.

On June 23rd, when the swap ended, Boudou said that the level of adhesion was 66.4%, a result that normalized 92.4% of the bonds that entered into default in the 2001-2002 crisis, if one takes into account the bonds that entered the operation of 2005.

At that time, the minister said that he'd accounted for US$12.067 billion in titles entering, but the final count rose almost US$800 million and so did the acceptance rate. That result "comfortably exceeded expectations that we'd put forth," Boudou said, who'd fixed a goal of at least 60% adhesion. In mid-May, they'd received 8.5 billion in bonds in default held by large banks, coming to 45% of the total. "There remained a small number (of bondholders) that have been hostile to Argentina's proposal. Who remain are the vulture funds, of which not one entered, but clearly they remain isolated," Boudou added at that time.

These creditors, considered the most aggressive, that seek to recover 100% of the nominal value of the bonds in default, have filed legal action against Argentina. Boudou said that the country's legal strategy against these creditors will be to "continue isolating them, showing that not only don't they have a non-cooperative proposal, but an irrational one." He said that also "if 92.4% have accepted the other proposal, it says that these creditors are acting in bad faith with the rest of the creditors."

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