MercoPress. South Atlantic News Agency

Argentine government expects quick return to international bond markets

According to Finance Undersecretary Adrian Cosentino, the SEC process has been completed

Argentina moved a step closer to a planned swap of defaulted debt and an issue of up to 15 billion US dollars in new bonds, with an amended filing to the US Securities and Exchange Commission, SEC

The swap is aimed at cleaning up fallout from the country's massive 2001/02 default and paving a return to international bond markets to raise money to meet mounting debt obligations.

Finance Undersecretary Adrian Cosentino told Reuters Thursday's filing meant the government had completed the SEC inquiry process and was awaiting final approval to launch the swap.

The spread on benchmark Argentine bonds dropped 34 basis points to 671 basis points over comparable US Treasuries on the news before coming back to 692. The narrowing of the spread reflects a market perception that the risks of investing in Argentina are lower.

Argentina hopes the swap will mop up some 20 billion USD in defaulted bonds that were not tendered in the earlier restructuring, removing legal obstacles to issuing new international debt.

Argentina faces an estimated 15 billion USD in debt obligations this year. Though much of that amount is funded through the budget, the government is seeking ways to raise money for payments, either through debt issues or tapping central bank foreign currency reserves.

The government's efforts to tap reserves have aroused controversy, leading to the firing of a central bank governor who opposed the move and clashes between the Executive and Congress and the Judiciary.

In an earlier amendment the Argentine government had provided more details on controversial figures on inflation and other data, but in the amendment on Thursday changes to the document were minimal, in a sign the process is close to completion.