Argentina launches defaulted bonds swap with a 66.3% discount
Argentina offered new bonds to holders of 20 billion US dollars of sovereign debt left out of an earlier settlement, seeking to end a nine-year default and regain access to international capital markets.
The government proposed similar terms to its 2005 restructuring, granting securities due in 2033 at a 66.3% discount, Economy Minister Amado Boudou said at a news conference in Buenos Aires. The proposal excludes past payments on warrants linked to economic growth and pays past due interest with 8.75% bonds due 2017. Argentina also may sell as much as one billion USD of new bonds due 2017, he said.
Argentina’s offer would compensate holders from Greenwich, Connecticut-based Gramercy to Stone Harbor Investment Partners of New York, as well as tens of thousands of individuals, many in Italy.
For the Argentine government, resolving the issue sets the stage for its first international bond sale since the 2001 default on 95 billion USD of debt. The country needs to borrow 12.5 billion this year, about 6 billion of which has not been lined up yet, according to estimates from Credit Suisse Group AG.
Boudou appealed to holders not to make a “mistake” and reject the offer. He said the government is “tough but serious” with debt holders. The government expects at least 60% of holdouts to accept the offer, Boudou said.
Argentina’s borrowing costs fell to the lowest level since 2008 ahead of Boudou’s announcement, with the extra yield investors demand to own Argentine bonds instead of US Treasuries narrowing 17 basis points, or 0.17 percentage point, to 6.01 percent, according to JPMorgan Chase & Co.
That’s the smallest yield gap since June 2008. Boudou said lower interest rates and a long-term sustainable debt level are the goals of the proposal and the deal creates a “new opportunity” for investors.
Creditors will pay banks’ fees on the swap, Boudou said. The government will pay no more than 160 million USD in interest, while par bonds issued in the swap will be capped at 2 billion, he said. Boudou said individual investors holding less than 50,000 USD of debt will receive a cash payment.
The government plans to start the debt swap offer in 10 days and will keep it open for 30 days. By excluding payments on the GDP-linked warrants, the government will save about 1.36 billion, Boudou said.
For investment funds that bought defaulted debt at prices as low as 15 cents on the dollar after the 2005 exchange, “it’s a no-brainer,” Redrado said in an interview before the announcement. The government had vowed after that restructuring not to negotiate a new deal with holdout creditors.
Argentina is restructuring debt as the economy emerges from an economic slowdown. South America’s second-largest economy grew an average of more than 8.5% a year from 2003 to 2008, before slowing to 0.9% last year, according to the national statistics institute.
The government budget forecasts economic growth of 2.5% this year, while Boudou said earlier this month that 2010 growth will exceed 5%.
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and his compiled remarks from Anglo Saxophone Media !!
www.marketoracle.co.uk/Article18622.html
as you know here ..my remarks are objective ....
England unfortunately can't pay back it's debts ..but
it makes “” covered swaps “” by it's Internationaized Commercial Banks
permanently !.... postpones permanently !......... how far !?
this is reality that this Economy on the brink of collapsing !
Por otra parte, acerca de la deuda es evidente que usted no sabe, que la deuda que estamos pagando es ilegitima y fraudulenta, porque fue obtenida mayormente durante la ultima dictadura, hay un fallo del juez ballesteros, por el cual le pide al congreso que tome la iniciativa para investigar y tomar una decision con respecto al hecho de seguir pagando una deuda ilegitima.
Entre otras cosas me gustaria saber en donde aprendio usted historia argentina, usted siempre afirma que durante los tiempos coloniales hasta 1880, ni españa, ni argentina ejercieron control alguno sobre la patagonia, dejeme decirle que los controles existieron, y se encontraban a lo largo de algunos puertos patagonicos, ningun pais controla lo que no le pertenece, no le parece?, yo siempre olvidaba de recalcar este hecho, por eso no lo habia dicho antes.
Con respecto a la deuda, dejeme decirle que la deuda que estamos pagando, es ilegitima y fraudulenta, porque fue obtenida mayormente durante la ultima dictadura militar, hay un fallo del juez ballesteros en el cual le pide al congreso nacional que investigue la deuda, y tome una decision acerca de seguir pagando une deuda que es ilegitima.
A lo mejor yo tampoco pueda lograr que usted me entienda, porque a la gente ignorante, necia y soberbia como usted es muy dificil que escuchen la opinion de otras personas.
The debt you are calling illegitimate was mostly accumulated during the 90s under Menem a democratically elected government it is legitimate. You need to read your history. and understand your economy.
Perhaps you can explain how you equate a claim with control. The King of Spain claims Jerusalem, but everyone knows he does not control Jerusalem. Equally Spain/Buenos Aires/Argentina did not have control over the majority of Patagonia until the 1870s even though they this had been claimed. This is a well known fact. It is true that there was control of some ports, like Carmen de Patagones but the fact is the rest of the territory was not controlled by Spain/Buenos Aires or Argentina until the Conquest of the Desert. Bahia blanca was built as a “fortaleza”. Why was it necessary to build a fort inside Argentine territory if Argentina had control over that territory? I've asked that specific question before, but you've never addressed this. Even contemporary accounts say that Buenos Aires' control did not reach much further than Azul.
And another question I have asked you before, but you always duck. If Spain/Buenos Aires/Argentina had control of Patagonia then why was an act of conquest necessary? Even the contemporary Argentines called it “conquest”. Surely you can't conquer your own territory?
12. You are an idiot! We know it's wrong not to pay, but the mess was done in 2001, now we have to reach an agreement, if companies didn't trust Argentina, then why are we growing like never before?!?!?!
You don't know a bit of our reality man!!!
13. It is called “restructuration”. Many countries have done it and many will do it (UK).
OMG!!!!! Now it turns out that all the brits who post here have lived in Argentina!!!!
You are so funny!!!
Nest months will be the most interesting!!! (economicaly talking) :-)
On the other hand if you want to talk about corruption, and the responsability of our society, let me remind you that your responsable society voted a guy like bush twice, beside you voted hes father firstly, and finally hes son took your country to the biggest recesion after the great depresion, before criticising another society, why dont you see what's going on inside of your borders.
when we vote a candidat, that's because we trust him, if that guy was finally a corrupter or a useless, that's not our fault, because we were deceived by him, beside most our ex presidents are very rejected by our soicety, only alfonsin was respected, because he was HONEST.
About our debt, this is evident how ignorant you are, your knowleadge is so little, i dont think that judge ballesteros is an ignorant like you, like it or not, part of our debt is illegitimate, and we need to survey, and the congress must take a deciton about it.
If you dont want to accept that part of our debt is illegitimate, that's your problem, is not an insignificant issue, it's very easy for you to criticise our posture, because you dont have to pay it, we want to honor our debt, but we reject the illegitimate part of it, ecuador did the same, and the ecuatorians only paid the legitimate part of their debt.
About the patagonia, keep on thinking whatever you want about it, accept it or not, spain and our authoritys excercised controls in diferent ports along the patagonic territory, but it was populated only by the indigenous people untill 1880, anyway if patagonia wasen't ours, then how do you explain our control over that territory.
About the fuertes, those were built to repel the rejection of the native people, anyway i told you that in some aspects i dont agree on what roca did.
About the word conquest, i dont agree on it, i think that the right word is ocupation, because we can't conquest our own territory, the history is full of wrong assertions, on the other hand, i dont agree on the phrase, the discovering of america, our continent was allready descovered, it was populated by the indigenous people, i think that the right word is redescovering, during my carear as profesor i learnt about these falacys of the history, it's not only mi idea.
“About the fuertes, those were built to repel the rejection of the native people” In other words, you did not control Patagonia, the native people did. My point all along.
I did not disagree that Spain/BsAs/Arg controlled some ports, but the fact is - and you cannot dispute this, because it is a fact, Spain/BsAs/Arg did not control the whole of Patagonia until the 1870s. This is not me “thinking whatever I want about it”. This is independently verifiable fact.
I did not ask if you thought the word conquest was the right one or not. I'm not sure if you are deliberately ducking my question again. The fact is word “conquest” was used at the time, by those who planned, organised and took part in the Conquista de Desierto. My question was, why does a country need to “conquer” its own territory? If Patagonia had truly been Argentine territory, then surely those at the time would not have used the word “conquest”?
this article is different from (#8)
About the patagonia, i will repeat for the last time that, if my country excersided controls along diferent ports of all the patagonic territory, how can you say it wasen't ours?, if it wasen't ours, then why did we control it, what you say about it, is false.
About the word conquest, those who organized that campain could use the words that they wanted, but it doesen't mean that they were right.
The people who studyed a carear like me, knows very well that the history is full of wrong assertions, i allready told you what i think about it, you can think whatever you want, i respect your assertions, but i dont agree with you, y punto.
Just because you controlled a couple of Patagonian ports and a small area around them, does not equate to the control of the whole of Patagonia. Even in the Pampas south of the Salado river there are very few towns with a foundation date before 1840. The fact is control did not extend very much further than that - and Alsina's zanja gives you a good idea of where control ended in the 1860s. What I say is not false, it's fact. It's not my opinion. There is a mountain of evidence to support what I am saying. You just need to open your eyes.
You still miss the point about the word “conquest”. Whether they were right or not to use the word at the time is irrelevant. What is important is that they used the word “conquest”, which has a very specific meaning. If you studied history, you would immediately realise how significant this is. The language THEY used at the time is of huge relevance.
I'm not expecting you to agree with my opinions, but sometimes facts cannot be ignored.
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