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miércoles, 3 de marzo de 2004

Ambito, version inglés-New solution for debt

Ámbito Financiero, Wednesday, March 3rd 2004, page 18, news paper version

The proposal base: Would consist in forming a liable fund of US$ 4.400MM
Argentina – New solution for debt

Pablo Tigani writes(*)
Today Government and IMF could call institutions and investors with the proposal of a jointly construction of an investing fund for debt in default. With only USD 4.400 millions, - equivalent to 5% of total – Dubai’s proposal improves in 20% to the title holders. Who could be those subscribers to this liable fund that could contribute USD 4.400 millions? :
1) International economic organisms that in argentine case, didn’t contribute with fresh funds nor suffered loss at all. 2) Investment banks that captured investors for argentine titles in their respective countries. In this way, they could avoid imminent trials, as those started in these days in Italy, involving their responsibility and threatening generate international jurisprudence. 3) Banks who are holding titles. 4) National treasuries of damaged investors’ countries, that would help their citizens. In this regard there already are proposal from politic groups in Italy. 5) Argentina, reveling her will of payment, with one fifth (USD 880 millions, less than a third of march 9th dead line).
 Implementation and vantages
The implementation of this proposal could start with a transference of bonds in default to the invest fund, by bondholders. Titles could be taken with a discount of 70%, giving in change 25% in new bonds and 5% in cash. This option is above accounting values of many beneficiaries, since an important rate of them have their credit balances in their oath statements in punishment. In this regard, due operative simplification, the investing fund for Argentine debt would put new titles without bank commissions.
This is the timely moment to practice above mentioned plan, because all international players attention is set over Argentina. This fund could be an international conciliator, that didn’t exist before, as a complement but not substitute of IMF.
With it, investors could recover additional 20% “cash” plus immediate real possession of new bonds. In this way, bona fide negotiation requirements and slowness blames could end. On other hand, Argentina could save expenditures and bank commissions for subsidiary services of liable entities, between USD70 and USD150 millions. Furthermore, as fund subscribers, institutions (IMF, WB, IADB) could have additional benefit taking part – which today don’t have, avoiding at the time an eventual default of their own debts-. Since recent legal incidents, bondholders and private investment funds rush to lock for seizures, affecting organisms’ character of “privileged creditor”.
The punctual goal of this raising for Argentina will express a new world strategic configuration according to the times. Allows that all parties may quit from tangle in a responsible way, improving credibility on institutions and settling a political frame of global solidarity.

(*) President of Hacer, Eugenio Pablo Tigani & Asoc. -CEO LeBonfante Int. Inv. Group. Chicago, IL USA

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