Argentine bonds were mixed Friday as markets digested news that the government plans to offer a new swap deal to the holders of defaulted debt. The benchmark peso-denominated bond fell 1.92% in price terms to ARS102 ($26.70), bringing the yield to 11.99%. The dollar-denominated Boden 2012 rose 0.47% in price terms to ARS318.50, to yield 12.13%. On Thursday, Economy Minister Amado Boudou said legislation will be sent to Congress on Monday that would exchange up to $20 billion in defaulted bonds. The bill would suspend a law that forbids the renegotiation of defaulted debt. To exchange the bonds, the government is planning to reopen a debt swap that was completed in 2005, though the terms of the new offer are expected to be worse. Investors will have to accept a discount of at least 65% of face value to participate in the new transaction, Boudou said, adding that the government would like to see at least 60% of the outstanding defaulted debt included in the reopening. Stocks fared poorly on Friday, in line with losses on Wall Street, which slumped due to declining commodities. Argentina's Merval Index slipped 0.58% to close at 2,295.88 points. The peso climbed to 3.8200 to the dollar from 3.8225 on Thursday. The Central Bank stepped into currency markets heavily throughout the week to prop up the greenback. The government bought dollars to sate strong demand for pesos as the dollar declines against most of the world's currencies and investors sought local currency to buy Argentine government debt.
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