Market Awaits Argentina Swap Result

Retail holders of defaulted Argentine debt had until yesterday to respond to the sovereign’s offer, amid speculation that the deal would stay open to boost participation. Final terms are to be announced June 30 and settlement August 11, and much depended on support from Italy, where a significant bulk of holdout retail holders resides. The sovereign is reported to be expecting to get more than 60% of the $18.3bn the sovereign admits to owing, short of the 80%-90% that some analysts are looking for. “While Argentina may reach its arbitrary goal of an adhesion rate of 60%, the country will be left with tens of billions of dollars in outstanding obligations, hundreds of court judgments still standing against the country and no access to international capital markets,” says American Task Force Argentina (AFTA), the bondholder group. “The Argentine government will still owe more than $30 billion to creditors arising out of its 2001 default. Until it fully settles these debts and satisfies the outstanding legal judgments against it, Argentina will be unable to normalize relations in the international community,” adds AFTA. Barclays is global coordinator on the offer to holdouts, with Citi and Deutsche as joint dealer managers.