BUENOS AIRES, Jan 12 (AFP) - Argentina was set Wednesday to try to sell wary investors its plan to write down 81.8 billion dollars in debt as it strains to emerge from biggest sovereign default in history.
Economy Minister Roberto Lavagna was to meet with bankers at 2000 GMT to launch the campaign to explain details of what would be the largest ever debt restructuring.
Many holders of Argentinian bonds are doubtful but the Buenos Aires government wants a deal by February 25.
Argentina went into default in late 2001 prompting the worst economic crisis in its history, plunging more than half the population into poverty.
Now Buenos Aires is proposing to normalize the situation offering bondholders new securities worth starkly less than what they originally were owed and with long grace periods.
General terms have been known since June: bondholders would receive about 35 percent of the face-value of the debt owed. Argentina's original bid was to pay 12 percent of the debt.
It would not pay interest on the money owed since 2001.
Some analysts believe the effort could be a success more due to investors' fatigue than their satisfaction. Court battles could take years.
"Bondholders worldwide are exhausted by the ups and downs of the past two years. Banks are going to advise them to accept the deal to get rid of these clients once and for all," said Rolf Koch of Germany, a representative of the bondholders' group Argentine Bonded Debt Recovery (Abdreco).
The plan marks the single greatest challenge for President Nestor Kirchner and his finance minister.
Wednesday's launch will be the first of a series of meetings around the world -- the first in Miami on Thursday -- in a "road show" organised by Buenos Aires to explain details of the write-down to investors.
Negotiators led by top ministry officials Guillermo Nielsen and Leonardo Madcur will tour the United States, Europe and Japan.
Argentina is proposing to swap 152 bonds that make up its defaulted debt (in six currencies and under eight different legal frameworks) for three new securities.
One would be at par (with no loss in nominal value) for private investors; another at "quasi-par" (worth 69.9 percent of the debt it would replace) or Argentina pension funds; and another discounted (worth 33.7 percent of the security it would replace) aimed at major international investors.
Debt swaps for new securities were expected to be launched friday in major financial centers with the exception of Japan where market authorities had yet to give a green light.
The deadline for the offer is February 25 and full results were to be released March 14.
Argentina promised the IMF and wealthy nations it would deliver an offer likely to be acceptable to large numbers of investors. But Lavagna has not said precisely how many investors have to sign on to the swap for it to be deemed a success.
The main association of Italian holders of Argentine bonds has already recommended members to reject the deal.
Nicola Stock, the head of Task-Force Argentina, called the Buenos Aires offer "unacceptable."
Buenos Aires keenly needs to win approval from the IMF if it is to regain access to global capital markets.
01/12/2005 16:58 GMT - AFP