February 25, 2005

DEBT? NO SWEAT:

Argentina Prepares to Shed Its Debt, Reenter Fiscal Markets: Deadline arrives for bondholders to decide whether to accept about one-third the value. (Héctor Tobar, February 25, 2005, LA Times)

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. [...]

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.

The debt restructuring will allow the nation to regain access to world financial markets.


Yet folk still can't grasp that we have the ChiComs over a barrel.

Posted by Orrin Judd at February 25, 2005 8:00 AM
Comments

I cannot imagine why anyone (especially aging Italians and Germans) are going to waste their time trying to sue Argentina. Perhaps it will give them passion in these twilight years, but certainly not any cash.

And watch if Citigroup, JPM Bank One, Wachovia, BofA, and other big US banks line up to donate.

Posted by: ratbert at February 25, 2005 10:28 AM

It would probably do Argentina and other struggling nations some good to be cut off from world financial markets for a while, but I'm sure Argentina will be loaded up on new debt that was illspent within 5 years.

Posted by: Annoying Old Guy at February 25, 2005 11:00 AM

Anyone who lends to Argentina is an idiot and deserves to lose their shirts.

Argentina should be a world power. It has all the tools and resources. The fact that it is such a financial disaster is a useful reminder for all of us about, aming other things, the need to vigilantly prevent corruption in government and in industry.

Posted by: Seven Machos at February 26, 2005 1:38 AM

Seven:

Don't forget the unions (especially "public" ones), and also the military.

Posted by: jim hamlen at February 26, 2005 10:17 AM

The last century of governance of Argentina has created an 'I'll get mine regardless..' mentality that cripples the entire system. Everything, not just goods and services, is seen as a zero-sum game.

Posted by: Bart at February 26, 2005 10:37 AM
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