Argentina says ‘many creditors’ want to swap into local law debt
Many investors are interested in swapping global Argentine bonds for paper governed by local law, cabinet chief Jorge Capitanich said on Friday, a day after the Senate approved the proposed debt exchange as a way to circumvent U.S. court rulings.
Argentina fell into default in July and is looking for a way to make its next global bond coupon payment due Sept. 30.
“There is obviously willingness among many creditors, or bondholders, to participate in the sovereign debt payment law, in order to get the money that is owed to them,” Capitanich told reporters.
The proposed law, which would allow foreign debt to be paid through intermediaries outside the United States, is the government’s attempt at getting back on a paying basis by putting sovereign debt out of reach of U.S. courts that have jurisdiction over some of Argentina’s original bond contracts.
The debt swap bill, expected to become law later this month, would replace Bank of New York Mellon with state-controlled bank Banco Nacion as the trustee for bond payments. It would also allow holders of restructured bonds governed by foreign law to swap them for paper governed by Argentine law.
“They probably wanted to know whether we would participate in a swap with local law (bonds), but they didn’t ask the question directly. I pre-empted it by saying we wouldn’t,” one fund manager who met with Lopez told Thomson Reuters’ IFR.
The debt swap measure passed the Senate on Thursday 39 to 27 and is expected to be approved by the lower house of Congress later this month, in time for the government to try to make its Sept. 30 bond payment.
Source: Reuters
