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03.02.2005 – 22:18

GCAB

GCAB Condemns Argentina's Most Recent Attempt to Coerce Holders Into Its Exchange Offer

New York (ots/PRNewswire)

Yesterday, the Argentine Economy
Minister Roberto Lavagna announced that the executive branch would
send to the Argentine Congress a law that would prohibit any future
offer to bondholders who do not accept the current exchange offer
commenced by Argentina on January 12, 2005. In addition, the law
would require the government to take all necessary steps to delist
defaulted bonds not tendered in the exchange offer.
This proposal is another deliberate attempt by Argentina to
threaten bondholders into accepting a unilateral and coercive
exchange offer that many holders are now realizing is well below
Argentina's ability to pay and does not represent fair value for the
defaulted debt held by hundreds of thousands of holders. It ignores
the various international legal systems under which the defaulted
debt was issued. Passing a law in Argentina does not subordinate a
creditor's rights that are contained in the bond agreements.
Holders of the defaulted debt should recognize that this action by
Argentina is a last ditch attempt to rescue a failing transaction
following public rejection of the offer from major bondholder groups.
Congressional action in Argentina will not supersede rights under
international law. Moreover, Argentina has historically adopted and
repealed laws to suit short-term political goals and this action
should not be considered a permanent change.
If there was any question that Argentina has not acted in good
faith, this development should clarify matters. Given this lack of
good faith, which is contrary to its written commitment to the
International Monetary Fund and the G-7 to do so, the IMF cannot
re-engage Argentina and, in any way, provide added financial
assistance as it will be acting in direct contradiction of its own
policy regarding "lending in arrears."
The Official Sector needs to finally express, in the strongest
possible terms, its condemnation of this maneuver, which will
establish a dangerous precedent for sovereign bond issuances. GCAB
again calls on the G-7 and the IMF to reject this plan and denounce
Argentina's unilateral and coercive exchange offer as Italy has
already done so rather than stand by in tacit approval.
About GCAB
GCAB was formally established in January 2004 by representatives
of all the major foreign bondholder constituencies of defaulted
Argentine debt, and consists of a broad-based group of holders. The
Steering Committee represents holders from Germany, Italy, Japan,
Switzerland, the USA and other countries. Its retail and
institutional members hold approximately US$40 billion in defaulted
debt of Argentina, accounting for 45% of the principal amount of
US$82 billion in outstanding Argentine debt and 73% of all
outstanding Argentine debt held outside Argentina.
In order to download its recent Investor Roadshow Presentation,
the Urban Class Action Appendix to the class notice distributed in
connection with the Urban Class Action filed in the United States, a
GCAB general membership form, position papers or obtain additional
information, please visit the GCAB website at http://www.gcab.org .
GCAB Contact:
    Hans Humes
    Greylock Capital Associates, LLC +1-212-808-1818
    Nicola Stock
    Associazione per la Tutela Degli
    Investitori in Titoli Argentini +3906-676-7603
Investors in Argentine securities must make their own evaluation,
analysis and decision with respect to participation in any exchange
offer, restructuring, debt swap or other transaction, based on such
information as they deem appropriate after consultation with their
own advisors and without reliance upon this communication or any
materials contained herein or furnished herewith or upon GCAB or any
of its members, affiliates or advisers. Any such evaluation, analysis
and decision should be based on, among other matters, the investor's
own views as to the financial, economic, legal, regulatory, tax and
other risks and consequences associated with Argentina's exchange
offer, including but not limited to the consequences of declining to
participate in any exchange offer proposed by Argentina, the
structure, terms and conditions of any proposed new securities, the
Argentine political situation and economy, convertibility and
exchange rate risks, and risks posed by developments in other
emerging market countries.
GCAB and each of its members, affiliates and advisors disclaims
any and all liability relating to any exchange offer or other
transaction proposed by Argentina or any creditor's decision
regarding its participation or non-participation in any such exchange
offer or any transaction or any litigation pursued by or on behalf of
such creditor either individually or in concert with others, whether
or not such decision was made in whole or in part based on
information furnished by or obtained through GCAB.
The information contained herein or furnished herewith are for
discussion purposes only and do not constitute an offer or
solicitation of an offer to purchase or sell any security. These
materials are not intended to form the basis, in whole or in part,
for any investment decision or to provide a rating or recommendation
of any kind with respect to any investment opportunity. Factual
information contained herein or furnished herewith has been obtained
from sources believed to be reliable, but its accuracy and
completeness cannot be guaranteed. Any financial and economic
projections and pricing estimates contained herein or furnished
herewith are illustrative only and are based on assumptions that may
prove inaccurate or incomplete. Actual prices, performance and
results may differ substantially. GCAB and each of its members,
affiliates and advisors disclaims any and all liability relating to
these materials including, without limitation, any error in or
omission from the information contained herein or furnished herewith
and any duty to update the same in whole or in part. These materials
speak only as of the date hereof and are subject to change without
notice. The views expressed herein or furnished herewith do not
necessarily represent the position of any GCAB member, affiliate or
adviser. GCAB and its members, affiliates and advisers may have
positions and deal as principal in transactions in securities
discussed herein (or options with respect thereto), including
positions and transactions inconsistent with the matters discussed
herein.
Web site: http://www.gcab.org

Contact:

Hans Humes of Greylock Capital Associates, LLC, +1-212-808-1818;
Nicola Stock, Associazione per la Tutela Degli, Investitori in Titoli
Argentini, +3906-676-7603, both for GCAB