April 19 2010

Argentine Retail Says No

Retail holders of Argentine debt untendered in the 2005 exchange are rejecting a reopening of the deal at terms unveiled last week. “The offer is a new attack on primary investors,” Mark Botsford, a US-based retail bondholder, tells LatinFinance. “We’re down 13 cents without even starting,” he adds. The holder estimates recovery from last week’s offer at 54 cents, versus 67 cents in 2005. Botsford – who claims to be the US-based retail investor with the largest Argentina exposure, at $500,000 in sovereign bonds – is forming a non-profit advocacy group with other retail holders worldwide. He adds that he has already secured support from Nicola Stock, president of Task Force Argentina (TFA), which represents over 180,000 Italian holders with $4.5bn in principal and claiming an estimated $4.5bn in PDI. Stock did not return calls seeking comment. Botsford also claims to have recruited to his association Argentine-based holders with $2.2bn in exposure. “We expect to get $10bn,” says Botsford. “We want the Argentine government to treat investors in the country as allies and friends and to enter into good faith negotiations,” adds the investor. Botsford declines to state what recovery levels the group will demand, adding that retail will pursue class action suits if necessary. Retail holders have tried several times in the past to unite and get better terms from the sovereign. However, Argentina has repeatedly refused to negotiate with such groups, claiming that they are unable to talk for all holders. Argentine officials have been generally unsupportive of individual holders, even suggesting in some cases that they should never have bought the notes in the first place. Argentina is offering a deal to holdouts that amounts to a 66.3% haircut, according to wire reports last week citing economy minister Amado Boudou. The proposal excludes past payments on GDP warrants and pays PDI with 8.75% bonds due 2017, wires report. Argentina also may sell as much as $1bn of new bonds d

Retail holders of Argentine debt untendered in the 2005 exchange are rejecting a reopening of the deal at terms unveiled last week. “The offer is a new attack on primary investors,” Mark Botsford, a US-based retail bondholder, tells LatinFinance. “We’re down 13 cents without even starting,” he adds. The holder estimates recovery from last week’s offer at 54 cents, versus 67 cents in 2005. Botsford – who claims to be the US-based retail investor with the largest Argentina exposure, at $500,000 in sovereign bonds – is forming a non-profit advocacy group with other retail holders worldwide. He adds that he has already secured support from Nicola Stock, president of Task Force Argentina (TFA), which represents over 180,000 Italian holders with $4.5bn in principal and claiming an estimated $4.5bn in PDI. Stock did not return calls seeking comment. Botsford also claims to have recruited to his association Argentine-based holders with $2.2bn in exposure. “We expect to get $10bn,” says Botsford. “We want the Argentine government to treat investors in the country as allies and friends and to enter into good faith negotiations,” adds the investor. Botsford declines to state what recovery levels the group will demand, adding that retail will pursue class action suits if necessary. Retail holders have tried several times in the past to unite and get better terms from the sovereign. However, Argentina has repeatedly refused to negotiate with such groups, claiming that they are unable to talk for all holders. Argentine officials have been generally unsupportive of individual holders, even suggesting in some cases that they should never have bought the notes in the first place. Argentina is offering a deal to holdouts that amounts to a 66.3% haircut, according to wire reports last week citing economy minister Amado Boudou. The proposal excludes past payments on GDP warrants and pays PDI with 8.75% bonds due 2017, wires report. Argentina also may sell as much as $1bn of new bonds due 2017. The government expects at least 60% of holdouts to accept the offer, Boudou says. It will pay no more than $160m in interest, while par bonds issued in the swap will be capped at $2bn, according to the reports. Barclays, Citi and Deutsche are leading the exchange.