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Last Updated: Friday, 4 March, 2005, 01:27 GMT
Argentine restructuring 'success'
By Elliott Gotkine
BBC News, Buenos Aires

Roberto Lavagna, Argentina's Economy Minister
Economy Minister Roberto Lavagna made the announcement
Provisional figures show that Argentina's record-breaking debt restructuring has been a success.

The news comes just over three years after Argentina defaulted on more than $80bn (42bn) of debt as part of the country's worst ever economic crisis.

Economy Minister Roberto Lavagna said Argentina's offer of new bonds for the old, defaulted ones had been accepted by 76% of creditors.

Analysts say it is a major step in the bid to prolong Argentina's recovery.

Those who rejected the offer may now try their luck with the courts.

'Intolerable'

Three years and two months after it was born, Argentina's debt default is dead.

Argentine President Nestor Kirchner
Kirchner: Argentina's debt before the restructuring was "intolerable"

The creditors' acceptance of the debt offer means that for every defaulted bond with a face value of $1, they will get a new bond with a market value of around 35 cents.

This reduces Argentina's public debt from more than $80bn dollars to $35bn, making it the largest such debt swap in history.

After the economy minister had spoken, an uncharacteristically sombre President Nestor Kirchner delivered a speech.

He said that Argentina's debt before the restructuring was "intolerable".

The default was one of the country's biggest obstacles to growth, he said.

Now, he said, was a moment for reflection.

Lingering debt

But Argentina has little time to spare.

Even after the restructuring it still has debts worth nearly three quarters of the value of its annual economic output.

Analysts say that to service these debts, Argentina needs to clinch a new loan deal with the IMF as soon as possible.

The country also needs to promote investment, they say, and to make the economy more competitive.


BBC NEWS: VIDEO AND AUDIO
Ministers announce the success of the restructuring




SEE ALSO:
Argentina takes hard line on IMF
28 Feb 05 |  Business
Water firm Suez in Argentina row
24 Jan 05 |  Business
Argentina pins hopes on debt deal
14 Jan 05 |  Business
Timeline: Argentina
31 Dec 04 |  Country profiles
Q&A: Argentine debt swap
13 Jan 05 |  Business


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