Argentina officially launches debt-exchange deal rejected by bond groups

Argentina has officially begun restructuring US$65 billion in debt, offering a bond swap for longer-maturity securities. Some of its major creditors have already rejected the proposal.

Investors will have until May 8 to accept an exchange of bonds issued in 2005, 2010 and 2016, according to a regulatory statement to the Luxembourg Stock Exchange. The deal, coordinated by Bank of America Corp and HSBC Holdings Plc, covers securities worth about US$64.8 billion.

Bond holders have criticised the proposed conditions, saying they impose a disproportionate burden on creditors as Argentina moves towards a new debt restructuring.The conditions include a three-year suspension of debt payments, a 62 percent reduction in interest and a 5 percent reduction in principal.

Argentina's US$4.25 billion bonds maturing in 2028 were barely 28.5 cents short at the start of the day in Europe on Wednesday.