Argentina asks Congress to reopen 2005 debt swap

BUENOS AIRES, Oct 26 (Reuters) - Argentina's government sent a bill to Congress on Monday to allow it to go forward with a debt restructuring to try to mop up some $20 billion in defaulted bonds.

If voted into law, the bill will overturn the "Ley Cerrojo," or Bolt Law, which effectively sealed a 2005 debt deal from being reopened to give a second chance to investors who did not agree to the unfavorable conditions of that swap.

The bill is expected to be easily approved in coming weeks, according to congressional sources and local media reports.

A spokesman at the congressional office that receives bills from the executive branch told Reuters the bill was presented on Monday evening.

The content of the bill has not yet been made public and is not expected to contain details on the terms of a new offer to investors, one of the congressional sources said.

Facing tight financing next year the government seeks to place new debt on international markets. But before it can do so it must clean up fallout from a massive debt default eight years ago. For details, see [ID:nN2262445]

The country defaulted on $100 billion in 2001 and four years later former President Nestor Kirchner offered holders of the defaulted bonds new paper worth only about 30 percent of the original.

At the time, about 75 percent of the investors took the offer and the rest decided to hold out for a better deal.

Some of those so-called holdouts have filed lawsuits against Argentina, which the government hopes to neutralize by reopening the 2005 debt swap and giving investors another chance to take the deal.

Last week Economy Minister Amado Boudou said investors would have to take even steeper losses than bondholders took in 2005, to enter the new swap. (Reporting by Vivianne Rodrigues; Editing by Fiona Ortiz and Carol Bishopric)