MercoPress. South Atlantic News Agency

Private Bondholders reject Argentine offer

The Global Committee of Argentine Bondholders; GCAB, said this Wednesday they were “extremely disappointed” with the latest restructuring offer to private creditors officially announced by Argentina last Tuesday.

In an official release from Rome and New York signed by Hans Humes and Nicola Stock GCAB states that the "unilateral Argentine offer is unacceptable both in form and results".

As was the case in early May, GCAB which represents 37 billion US dollars in defaulted Argentine sovereign bonds, regrets not having been sufficiently consulted about the restructuring proposal design. GCAB calls on the Argentine government to initiate good faith negotiations with creditors and elaborate a new offer.

"We call on the government of Argentina and its financial and legal advisors to reconsider the government position to avoid good faith negotiations".

Further on GCAB demands the immediate start of significant and constructive sensible negotiations with private creditors of Argentina rather than unilateral debt restructuring.

This week Argentina improved its original repayment offer to private defaulted bondholders by including accrued interests to June 30. However the Argentine government is adamant in the 75% face value cut.

With interests included the overall debt jumps from 81 billion US dollars to 104 billion, but the sum to be repaid totals 43 billion US dollars, double the original proposal.

Emerging markets analyst from Credit Suisse First Boston Lacey Gallagher said the new offer can be improved in three areas: maturing of bonds (which range between 30 and 42 years); the nominal 75% cut, and the interest rate which is considered too low.

"Essentially the Argentine government could act improving any of these factors, plus paying accrued interests".