UPDATE 4-Argentina to announce debt swap offer on Thursday

* President says to detail offer at 2130 GMT

* Government still needs regulators approval for launch

* Country risk (11EMJ: ) narrows to 21-month low
(Adds analyst, bonds)

By Kevin Gray

BUENOS AIRES, April 15 (BestGrowthStock) – Argentina will unveil
its offer to swap up to $20 billion in defaulted debt on
Thursday, President Cristina Fernandez said, a deal that could
allow the country to tap global credit markets for the first
time in eight years.

The government will make public its offer at 2130 GMT (1830
local time), Fernandez said in a televised speech. Economy
Minister Amado Boudou told Reuters the announcement will
include “specific details” about the offer.

“The important thing is that we keep doing things that will
allow our companies, both big and small, to be able to access
international credit markets,” Fernandez said.

The government hopes the offer to bondholders who rejected
a debt exchange five years ago will end investor lawsuits and
clear the way for Argentina to return to debt markets as it
faces tight financing and rising debt obligations this year.

Latin America’s No. 3 economy has been a pariah in global
finance since its massive debt default in 2002 at the height of
a sharp economic and political crisis.

Argentina is moving to roll out the terms as regulatory
approval for the deal is still pending in Europe and Japan.

Argentine Finance Secretary Hernan Lorenzino was expected
to meet officials from Italy’s Consob securities regulator in
Rome on Thursday. Consob will probably give the green light
next week to the Argentine offer, a source close to the matter
said on Wednesday. [ID:LDE63D22J]

Filings with regulators have given investors a broad idea
of the swap’s terms, but several key aspects remain unknown
such as whether Argentina will make past due interest payments
on the bonds and a December payment on securities linked to
economic growth.

“We’re going to be looking at how much past due interest
they recognize and then we can infer the participation rate,
the supply and the impact on credit spreads,” said Siobhan
Morden, head of Latin American strategy for RBS Securities in
Stamford, Connecticut.


Roughly three-quarters of the holders of defaulted
Argentine bonds accepted a 2005 restructuring deal, but some of
those who rejected the offer have filed lawsuits looking to
recoup the full value of their bonds.

In a fresh legal challenge, a U.S. federal judge was set to
consider a temporary restraining order on the debt swap on
Thursday. [ID:nN14189522]

Fernandez hopes the debt swap will allow her cash-strapped
government to sell international bonds, helping her to maintain
spending in a preelection year and meet rising debt payments

Argentina’s government faces debt obligations of about $15
billion this year and has a fund gap estimated at up to $7

The government has made it clear that it wants to pay a
single-digit interest rate on any new bond issues and even high
investor acceptance of the offer does not guarantee Argentina
yields of below 10 percent.

In 2005, Fernandez’s husband and predecessor, former
President Nestor Kirchner, oversaw a first restructuring of
Argentina’s $100 billion in defaulted bonds that paid about 33
cents on the dollar.

Argentina’s country risk narrowed to its tightest since
July 2008 on expectations that the swap’s launch was imminent,
as gauged by JP Morgan Emerging Markets Bond Index Plus
(11EMJ: ).

The spread between the yield on benchmark Argentine bonds
and comparable U.S. Treasuries narrowed by 17 basis points to
601 basis points, according to the index.

Locally traded Argentine bond prices were also higher. The
peso-denominated Discount bond (ARDISCP=RASL: ) traded up 0.72
percent to an ask price of 112.10.

Stock Market Investing

(With additional reporting by Helen Popper;Editing by Diane

UPDATE 4-Argentina to announce debt swap offer on Thursday