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Italian Defaulted Bond Holders Seem Prepared to Accept Argentine Debt-Swap Plan

Friday, May 14th 2010 - 04:20 UTC
Full article 3 comments
TFA head Nicola Stock in 2005 called the swap “unacceptable and unilateral” TFA head Nicola Stock in 2005 called the swap “unacceptable and unilateral”

In an extensive report, the Task Force Argentina (TFA)—which represents Italians holding some 4.5 billion US dollars in defaulted Argentine sovereign bonds—gave an ambiguous declaration over Argentina's debt-swap plan.

The report clearly indicates that the offer by Argentina is not any better than that presented in 2005—which Italian bondholders rejected—but at the same time the report states that it's a personal decision that relies on every creditor to accept or reject the debt swap.

This posture changes radically from the one adopted in 2005 before the swap offer delivered by former President Néstor Kirchner and Economy Minister Roberto Lavagna, when TFA's head Nicola Stock had urged its members to reject the Argentine offer for considering it “unacceptable and unilateral.”

The report that was sent to all the TFA's small bondholders (almost 180,000) still considers that the offer as a “unilateral decision” where no previous discussion and/or negotiation was held with bondholders. Though, it's logical to see that the new swap haven't improved the one made five years ago, Stock seems to have changed his mind as he now let holders to make their final call.

This slight change of view can be seemed as a little battle won by Argentine Economy Minister Amado Boudou. It is also to be remarked that the TFA dedicated some paragraphs to hardly criticize Argentina's economy.

The cannons were aimed at President Cristina Fernández de Kirchner's economy policies. The report particularly refers to the exchange intromissions at the Central Bank, the high interest rates and inflation, the salaries control, the fiscal measures adopted, and the social and political tensions mounted lately.

On its website, the TFA says that the new swap offer still contains “extraordinarily long” reimbursement terms.

Categories: Economy, Argentina.

Top Comments

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  • NicoDin

    Well MR. Nicola Stock was very naive to think that he could twist Argentina’s decision by using his influence in Washington and in the international media.

    Also has provoked a major lost to investors in having extraordinary expenditures in lawyers, publicity, media coverage etc.

    And now what? The investors will get less.
    Nicola, Nicola ragazzo, non devi mangiare tanta pasta fa male.

    May 14th, 2010 - 05:55 am 0
  • jorge!

    They better accept or be prepared to lose more money in future!!!

    May 15th, 2010 - 03:20 pm 0
  • Karolus

    Dear Dr. Stock,

    Thank you for your hard work. We need people like you to stand up to the arrogance of administrations who hide behind the shield of sovereign immunity to blatantly flout rule of law and trample the interests of private individuals who remain defenseless since they are not admitted to international courts. In the face of such adversity it is no wonder that after five years of unadulterated iniquity you feel it is up to individual investors to form an opinion - not on the fairness of the offer which is clearly a unilateral rip off - but on the prospects of future improvement, given the quasi universal blindness and/or defeatism of investors/electors/citizens; how it is that anyone can seriously consider lending to a sovereign, whoever that sovereign may be, remains a mistery to me, given the comptempt with which private investors are treated when the going gets rough.

    Dr. Stock you deserve high honours - which you will never get.

    In admiration and thanks,


    May 15th, 2010 - 06:45 pm 0
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