MercoPress. South Atlantic News Agency

Debt swap concluded

Argentina officially ended one of the most agonising periods of its recent history when it announced the completion of its record $100bn debt exchange on Thursday.

Concluding the exchange has long been seen as the single most important step towards repairing relations with international capital markets after enduring a traumatic recession that ended in December 2001 with the fall of the government and the biggest sovereign debt default in history.

A terse statement from Argentina's Economy Ministry on Thursday said: "The Argentine Republic has concluded the last operational phase of the debt restructuring. . . the new bonds and corresponding payments have been made."

"This is an extraordinary achievement for the country's economic team," said one foreign bondholder who accepted the offer, which opened in January and ended February 25.

Indeed, after three years of battling with bondholders, Roberto Lavagna, economy minister, and his team managed to persuade investors holding more than 76 per cent of the defaulted debt to accept their offer.

At about 34 cents on the dollar in net-present-value terms, the offer represents the biggest debt reduction achieved by any comparable country. By one of Mr Lavagna's calculations, the swap has saved the country more than $67bn.

But while the conclusion of the exchange will doubtless be celebrated by President Néstor Kirchner's administration, the news is likely to produce less joy among those who rejected the offer.

A small group of "hold-out" investors who shunned the offer recently tried to seize or attach $7bn of the defaulted bonds through a New York court, arguing that the bonds belonged to Argentina and were therefore legitimate targets for attachment.

Their arguments delayed the exchange but were ultimately rejected, and Thursday's completion of the exchange now closes the door on using similar strategies in the