BUENOS AIRES (Dow Jones)--Argentina's government will reopen the debt exchange offer that closed in June until the end of the year in hopes of enticing more holdout investors to swap their defaulted bonds for new securities, according to local media.
The reopening will offer investors the same securities--par bonds and discount bonds--as those in the June swap, the online version of financial daily Ambito Financiero reported Wednesday, citing government sources.
In June, investors tendered $12 billion in defaulted bonds for a combination of new bonds and cash equivalent to about 34 cents on the dollar.
Between the exchanges in 2005 and June, investors have tendered about 92% of the nearly $100 billion in bonds that Argentina defaulted on in 2001.
However, about $4.5 billion of defaulted bonds are thought to be in the hands of vulture funds, which continue to pursue Argentina's government in the courts.
Argentina's federal government has yet to return to international debt markets to finance heavy spending given the availability of domestic financing sources and lingering fears that vulture funds could lay claim to the proceeds of a bond issuance abroad.
Instead, the administration of President Cristina Fernandez has borrowed from social security agency Anses and tapped the central bank's reserves to pay down debt and to finance government programs.
Fernandez and Economy Minister Amado Boudou in recent months have downplayed the likelihood of a bond issuance in the near future even though the yield demanded by investors to buy Argentine sovereign debt has fallen to the mid-single digits from more than 10% in the first half of the year.
-By Ken Parks, Dow Jones Newswires; 54-11-4103-6740, ken.parks@dowjones.com
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