Argentina Prepares to Shed Its Debt, Reenter Fiscal Markets(1$bonds at .33

[papau]

http://www.latimes.com/news/nationworld/world/la-fg-debt25feb25.story

THE WORLD
Argentina Prepares to Shed Its Debt, Reenter Fiscal Markets
Deadline arrives for bondholders to decide whether to accept about one-third the value.
By Héctor Tobar
Times Staff Writer

February 25, 2005

BUENOS AIRES — Argentina is expected to complete the largest debt restructuring in history today, hoping to end the long saga of financial excess, collapse and default that has made the country's name synonymous with fiscal irresponsibility.

Today is the deadline for President Nestor Kirchner's take-it-or-leave-it offer to worldwide investors who own the nearly $103 billion in bonds and interest that Argentina defaulted on three years ago: Accept payment in a new series of bonds that will, on average, pay back investors one-third the value. Most are expected to take it, but some have already filed lawsuits.

"There will be no other offer," Kirchner told investors this week. "I tell you this with all kindness, with pain in my heart. But we've had to come and fix the debt other people created."

Kirchner took office less than two years after interim President Adolfo Rodriguez Saa declared a moratorium on debt payments on Dec. 23, 2001 — to rapturous applause from Argentina's Congress. Since then, Argentina has not paid a dime on the debt.

Argentina will issue new bonds to replace the $102.6 billion in defaulted bonds and interest.

Despite the seemingly bad terms of Kirchner's offer, financial observers say about 75% of the bondholders are expected to accept. Officials at the International Monetary Fund and other agencies have said that would probably end Argentina's status as a financial pariah.<snip>