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Argentina Offers Bond Buy-Back
World Economy

Argentina Offers Bond Buy-Back

Argentina offered Thursday to buy back $6.7 billion in bonds due in 2015, saying the move proved it remains solvent despite a damaging legal battle with two creditors, AFP reported.
“These bonds are due in October 2015. (The buy-back) is to demonstrate that we have the capacity and the will to pay,” said Economy Minister Axel Kicillof in announcing the move.
Kicillof said Argentina was offering cash for the “Boden 2015” bonds and would pay the market price of 97 cents on the dollar.
The buyback offer, good from December 10 to 12, will be financed partly through a new 2024 bond issue worth $3 billion.
Kicillof invited bondholders who want to “invest in the country” to exchange their 2015 bonds for 2024 bonds.
Argentina is locked in a legal battle with two hedge-fund creditors that refuse to accept the South American country’s plans to restructure the $100-billion debt it defaulted on in 2001.
The New York federal judge hearing the case, Thomas Griesa, has decided in favor of the hedge funds and ruled that until Argentina pays them the $1.3 billion due, it cannot pay other creditors who agreed to take steep losses on the face value of their bonds.
The ruling has forced Argentina into default for the second time in 13 years. That, coupled with its falling foreign reserves, has raised fears about the country’s credit-worthiness.
Negotiations to resolve the impasse with the hedge funds have repeatedly broken down, but they are expected to resume next year, after the expiry of a clause in the debt restructuring deal that guarantees equal treatment for all bondholders.

 

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