MercoPress. South Atlantic News Agency

Argentine massive bonds swap on track

The United States Securities and Exchange Commission, SEC has given the much awaited green light to the huge restructuring package of Argentine debt.

"The debt swap has been approved and now we must wait for Argentina to advance", said John Heine SEC spokesperson.

Argentina defaulted in December 2001 and has offered to swap an estimated 101 billion US dollars of unpaid sovereign bonds for approximately 42 billion US dollars in new debt.

According to the arrangements worked out by the Argentine government and several banks acting as debt operators one third of the bonds will be sold in New York with the rest going to European and Argentine markets. The launching day was originally established January 17 but since it's a national holiday in the US the date could be changed admitted Argentine sources.

Analysts expect an estimated 70% of investors to accept the offer, but some bondholders have already expressed their disagreement with the offer.

The "Task Force Argentina" which represents a significant group of bond holders, mainly Italians, has described the offer as "unacceptable", and not different from the previous November offer.

In Argentina financial sources indicated that the presentation of the offer will take place January 12 in the Buenos Aires Stock Exchange, but the formal process will only open two days later.

Simultaneously a team from the Argentine Economy Ministry headed by Finance Secretary Guillermo Nielsen will begin January 12 a round of US and European cities to promote the "pos-default" bonds.

The President Kirchner administration has also agreed with the Argentine pension funds which hold 30% of the defaulted bonds to adhere to the swap and will also launch a massive publicity campaign to promote the new bonds among Argentine private creditors.

Internationally the marketing will be responsibility of the New York based GS Proxylatina, a company which specializes in restructuring sovereign and private debts. They will be contacting all individual bond holders to explain the conditions of the new bonds. But the scheme, after three years of negotiations, will still leave many bondholders with only some 25-50% of their initial investment.

The Kirchner administration has resisted pressure to improve the offer arguing that Argentina needs resources to fight a social crisis that has left over 40% of the population below the poverty line.