BUENOS AIRES — Argentina is expected to complete the largest debt restructuring in history today, hoping to end the long saga of financial excess, collapse and default that has made the country's name synonymous with fiscal irresponsibility.
Today is the deadline for President Nestor Kirchner's take-it-or-leave-it offer to worldwide investors who own the nearly $103 billion in bonds and interest that Argentina defaulted on three years ago: Accept payment in a new series of bonds that will, on average, pay back investors one-third the value. Most are expected to take it, but some have already filed lawsuits.
"There will be no other offer," Kirchner told investors this week. "I tell you this with all kindness, with pain in my heart. But we've had to come and fix the debt other people created."
Kirchner took office less than two years after interim President Adolfo Rodriguez Saa declared a moratorium on debt payments on Dec. 23, 2001 -- to rapturous applause from Argentina's Congress. Since then, Argentina has not paid a dime on the debt.
Argentina will issue new bonds to replace the $102.6 billion in defaulted bonds and interest.
Despite the seemingly bad terms of Kirchner's offer, financial observers say about 75% of the bondholders are expected to accept. Officials at the International Monetary Fund and other agencies have said that would probably end Argentina's status as a financial pariah.
The debt restructuring will allow the nation to regain access to world financial markets.
The Bank of New York is the global exchange agent for the debt swap, a massive series of transactions described in financial circles with superlatives.
It is the most complex ever because the bonds were issued under the laws of eight countries and in 14 currencies. The debt swap, in dollar value, is also the worst loss on investment offered to holders of sovereign bonds in recent times.
"It's been the large size of the debt that has given Argentina more room to maneuver" during the three-year standoff, Carola Sandy, an analyst at Credit Suisse First Boston in New York, said by telephone.
With Argentina's official poverty rate hovering around 50% of the population and the economy only beginning to recover after years of recession, Kirchner's government has argued the country cannot pay more.
"The government kept insisting that this offer was its last and only one," Sandy said. "Investors now believe them."
