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Argentine sovereign bond holdouts reject latest payment offer

Saturday, January 9th 2010 - 14:13 UTC
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Argentina's new debt-swap offer to US creditors is “unacceptable” and does not improve on a proposal it made five years ago, the president of the debt-holding group Argentina Task Force, Robert Shapiro, said on Thursday, quoted by French news agency AFP.

President Cristina Kirchner in December got Argentina's Congress to approve a settlement offer to creditors holding 20 billion US dollars in defaulted debt that would reimburse them for 45-75 percent of the money owed.

The offer, an attempt to close the chapter on Argentina's 2001 default worth some 95 billion dollars, could be presented shortly to the US Securities and Exchange Commission in New York, according to media reports.

Argentina is trying to sway creditors who have been holding out for more since the offer was first made five years ago.

“After five years, the Kirchners have come with an offer that is not better than the offer that created this crisis. It was unacceptable to a lot of lenders five years ago, and for most of them will be unacceptable again, I expect” said Shapiro.

Handled by three international banks including Barclays, Citi and Deutsche Bank, Argentina's offer, however, could interest investment funds that bought Argentine bonds at a discount after the 2001 crisis.

“For them the old offer is a good offer, in the sense they bought deeply discounted debt,” Shapiro said.

The Argentina Task Force representing some 30 US national and state associations and thousands of small US investors is requesting the US Congress to approve a law banning countries that default on their debt from international financial markets indefinitely.

Shapiro did not comment on the current struggle between Kirchner and the head of Argentina's central bank who was fired Thursday by presidential decree and reinstated by an administrative court ruling.

Central Bank Martin Redrado refused to hand over 6.6 billion US dollars from Argentina's foreign currency reserves to pay off part of a 13 billion dollar payment of the national due this year, after the president ordered him to do so.

Categories: Economy, Argentina.

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