MercoPress. South Atlantic News Agency

Argentina denies “unilateral rupture” with IMF

Argentina's Foreign Affairs minister Rafael Bielsa denied Wednesday that his country was thinking in a “unilateral rupture” with the IMF if an agreement on the refinancing of sovereign debt is not reached and further ratified that there will no new offer to private creditors who didn't join the recent debt swap.

"In first place it's not in the philosophy of this administration the unilateral rupture of an agreement" with the IMF said Mr. Bielsa in Berlin where he's part of the delegation with President Nestor Kirchner currently visiting Germany. "The attitude is rather, let's say fight strongly to make the understanding possible to commit and sustain; therefore not paying the IMF sounds odd", added Mr. Bielsa.

Argentina suspended the agreement with IMF last August arguing it wished to avoid "interferences" in the sovereign bond swap, but now must retake and refinance pending payments with the multilateral organization.

The debt swap of Argentine defaulted bonds was accepted by 76% of creditors but the IMF apparently is conditioning talks to a full agreement with all creditors. However the Buenos Aires press published statements from unnamed officials saying that President Kirchner favours suspending repayments to the IMF if a quick agreement is not reached. And if the "rupture" situation is reached, IMF would cease to be a privileged creditor and payments would concentrate on holders of the new swapped bonds.

Argentina must refinance with IMF from now to 2007, 5,4 billion US dollars credits.

However the debt swap which was to become effective April 1 is currently bogged in a New York Appeals Court that must decide on the embargo of bonds totalling 7 billion US dollars belonging to the operation. The demand was presented by the so-called "vulture funds".

Mr. Bielsa reiterated that there will be no offer to the almost 24% creditors who rejected the defaulted bond swap. But in a more conciliatory spirit Mr. Bielsa anticipated that in three, four years creditors will receive some compensation be it "through the courts or conventionally; this is normal not only in Argentina".

Meantime Economy Minister Roberto Lavagna reiterated that Argentina is committed to reach an agreement but linked to the absence of "discriminatory stances" from IMF.