A group that represents some of the biggest foreign investors of Argentine bonds has slammed what it sees as the “preferential treatment” given by the government to local pension funds in a recent accord to restructure $17 billion of sovereign debt.
“Making side arrangements with subgroups of creditors is another violation of Argentina’s commitment to the global credit markets to enter into good faith negotiations,” said the Global Committee of Argentina Bondholders (GCAB), which claims to represent $38 billion in defaulted Argentine bonds, in a statement yesterday.
GCAB is angry over a presidential decree last week that authorized the restructuring of about $17 billion in defaulted bonds held by local pension funds. The Argentine government offered a special deal to the funds swapping US Treasury debt for local currency bonds. The decree allows the funds to swap $1.6 billion in defaulted Treasury bills they were forced to accept in 2001 for a peso-denominated bond with a shorter maturity than other bonds offered to creditors holding defaulted debt.
“If Argentina had to employ additional incentives to attract Argentine creditors over whom it exerts considerable regulatory control, we can only speculate on the additional incentives it should afford to reach an accord with its global creditors,” said Nicola Stock, co-chairman of GCAB.
The group has consistently stated that it will not accept Argentina’s current restructuring offer. The government plans to swap $40 billion in new debt for the overall $100 billion in default, which includes unpaid interest due.
Argentina is expected to submit its formal offer to the US Securities and Exchange Commission in the next few days. Once the SEC gives the offer the green light, it will be put to the sovereign’s creditos.