The Ad Hoc Group of Argentina Exchange Bondholders has announced that its members will be entering Argentina’s debt swap proposal to the tune of almost US$5 billion on Monday.
In a communiqué, the creditors said that the government’s “amended proposal is a consensual resolution that offers a beneficial outcome for all participants and is an offer that all creditors should accept.”
The group urged all those holding bonds from the 2005 and 2010 bond swaps as well as global bonds “to join them in participating in Argentina's external debt restructuring.”
"Bondholders who consent to the exchange prior to the August 28 expiration date will be eligible to receive additional consideration on account of accrued interest and will have greater ability to select the new bonds received. Those who do not consent to the offer will not receive these additional benefits," the communiqué pointed out.
The group includes such funds as HBK Investments, Monarch Alternative Capital LP, Paloma Partners Management Corp., Pharo Management (UK) LLP, Redwood Capital Management, LLC and VR Capital Group among others.
The commitment is to enter with almost US$3.7 billion worth of bonds from the 2005 and 2010 swaps and over US$1.1 billion in global bonds.
This group thus joins the Ad Hoc Committee (headed by BlackRock investment fund) and the Argentina Creditor Committee, who had committed themselves to the restructuring earlier in the week.
Argentina has already presented its bond swap offer to the Securities & Exchange Commission (SEC) of the United States, giving the bondholders until August 28 to join the swap whereupon they are to receive their new bonds on September 4. At the close of this month the Economy Ministry will be announcing the percentage of adhesion, about which officials are optimistic.
President Alberto Fernández’s government presented its first offer for a bond swap on US$66 billion of public debt back in April but after extended negotiations between now and then the net present value of recovery climbed from 39 to 54.8 cents per dollar, gaining the consensus of the three hitherto intransigent creditor committees who represent around half of the bonds at stake.
Argentina has been in selective or technical default since May when it failed to meet interest payments to the tune of half a billion dollars on three of the bonds in question.