September 3, 2009 / 12:25 AM / 10 years ago

UPDATE 3-Argentina launches new bond in debt swap

* Gov’t launches new Bonar 2015 paper in pesos

* Boden 2014 CER bonds and guaranteed loans can be swapped

* Swap aims to extend maturities to ease payment burden (Adds details when new bond swap will open)

BUENOS AIRES, Sept 2 (Reuters) - Argentina opened the second phase of a swap of inflation-indexed CER bonds on Wednesday by launching new peso-denominated 2015 debt as it seeks to ease a financing crunch by extending maturities.

Economy Minister Amado Boudou told reporters on Tuesday the second tranche of the swap would be open to Boden 2014 paper and so-called “guaranteed loans” that did not enter another swap operation earlier this year. [ID:nN01513219]

“(The swap) has the twin objective of easing the burden of debt payments ... up to and including 2012 and at the same time retiring debt that is CER-adjusted,” said a government resolution published in the official gazette, which did not put a figure on the second phase of the operation.

Argentina last week launched the first phase of a swap to exchange up to 8.3 billion pesos ($2.14 billion) in short-term debt linked to inflation for reopened Bocan 14 bonds paying Badlar plus 275 basis points.

That part of the swap, which is due to close on Sept. 7, was open to PRE9 and PR12 bonds.

As well as improving the country’s debt profile ahead of the 2011 presidential election, the swap aims to replace inflation-indexed paper at the center of a controversy over official consumer price data.

A third of Argentine debt is linked to inflation, and economic analysts and opposition politicians accuse the government of under-reporting consumer price data partly to save money on payments.

In the country’s latest bond swap, eligible paper will be exchanged for a new Bonar 2015 bond paying the Badlar BCRA18 bank market interest rate plus 300 basis points and interest will be paid quarterly.

The economy ministry said the swap will open on Friday and close on Monday, Sept. 7 and will exchange “guaranteed loans” and Boden 2014 paper.

The minimum amount of the new bond issue will be a nominal value of 1 billion pesos ($259 million), the ministry said in a press release.

Much of the CER bonds eligible for the swap are held locally by public sector agencies.

Boudou, who has pledged to restore credibility to the country’s inflation data, has described the debt swap as a first step toward helping Argentina regain access to global credit markets. [ID:nN26270160]

Latin America’s No. 3 economy has been virtually shut out of international debt markets due to lingering fallout from its massive 2002 default.

Economic analysts say the swap should help ease the government’s financing squeeze for the rest of this year and in 2010 when it faces $13 billion in payments. (Reporting by Helen Popper; Editing by Andrew Hay and Carol Bishopric)

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