Board-Ansicht
Mix-Ansicht- Argentinien wirft voraussichtlich das Handtuch - Default on $38 Billion - Ghandi, 29.10.2001, 19:11
Argentinien wirft voraussichtlich das Handtuch - Default on $38 Billion
Ãœberraschend kommt das nicht.
Die Schuldenquote in Relation zum BIP liegt m.W. ähnlich hoch
wie die Deutschlands. - Pech für Argentinien, dass es eine
geografische Randlage innehat. Siehe dottores Hinweise zum
Zusammenhang zwischen Zins und Distanz.
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Argentina Signals Default on $38 Billion of Debt (Update1)
By John Lyons
Buenos Aires, Oct. 29 (Bloomberg) -- Argentina signaled it would default on at least $38 billion of debt held by international investors when it hired Merrill Lynch & Co. to help renegotiate the terms of the securities. Bonds tumbled.
``We're getting closer to the end,'' said David Bessey, who manages $1.5 billion of emerging market debt for Prudential Financial, Inc., including Argentine bonds.
Argentina's floating rate bond due 2005 fell 5 to an offer price of 59.75, the lowest in five years. The yield on the bonds, now about 37.6 percent, has more than doubled since June. Moody's Investors Service this month slashed Argentina's credit rating to ``Caa3,'' its lowest on any country.
The government said Merrill Lynch International President Jacob Frenkel, former governor of Israel's central bank, would head a group advising Argentina on issuing new securities to investors. Analysts said the new debt probably will have lower interest rates and longer maturities than Argentina's outstanding bonds because the government can't pay its obligations.
Argentine Economy Minister Domingo Cavallo said the debt exchange would be voluntary; he didn't say what the country would do if investors don't accept the terms. Standard & Poor's, which also cut its credit rating for Argentina, has said it would characterize such a transaction as a default if the securities investors receive have a lower value than what they already own.
Paying Interest
Unlike in the late 1980s when Argentina stopped making interest payments, the government is sending a message to investors that interest, though reduced, still will be paid. It is lining up financing and announcing the restructuring before the country misses any debt payments.
``If you cram a restructuring onto someone it's essentially a default,'' said Charles Cassel, who helps manage $450 million in emerging market assets at Standard Asset Management and sold most Argentine holdings last year. ``They are saying if you don't help us out now, you will end up getting far less.''
Cavallo said the country will depend on International Monetary Fund loans and support from the seven most industrialized nations to help carry out the transaction.
``We are going forward with an operation to lower interest rates, which will be voluntary, without affecting investors or depositors,'' Cavallo said on national television last night. ``The plan is ready and has consensus, but before we can announce details, there are still deals to be worked out with the International Monetary Fund and banks.''
The default would be the second time in a decade that Argentina was unable to pay its debt. In 1992, the country issued about $25 billion of so-called Brady bonds in exchange for debts accumulated in the late 1970s. Other countries that restructured defaulted debt, such as Mexico, cut spending, reducing their dependence on foreign capital. Mexican floating-rate bonds that mature in 30 years yield about 8.5 percent.
1990s Borrowing
Argentina raised about $89 billion on capital markets in the past 10 years, most through foreign bond sales, to help finance a widening budget deficit.
In the past several months, the government has tried to reduce the deficit by cutting state wages and pensions by 13 percent, raising taxes and slowing tax transfers to provincial governments. Still, tax collection fell 14 percent in September and the government has faced increased opposition from workers, the unemployed and provincial leaders to its cost-cutting plans.
The country has a total $132 billion of public debt, including about $95 billion of bonds. The government estimates international investors hold about $38 billion of the bonds; Merrill says international bondholders own $45 billion worth, while other banks say the amount is as high as $55 billion.
The government already is demanding that domestic banks and pension funds to swap at least $14 billion of federal and provincial bonds for new securities that pay 7 percent interest, compared with a current rates of about 25 percent.
An IMF team will be in Buenos Aires today. Economy Ministry officials plan to seek an early disbursement of $1.2 billion in IMF loans originally set for December, Clarin newspaper reported. Officials also plan to tap $3 billion earmarked by the IMF to help complete the bond swap.
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