Some explanations on the exchange of the debt After more than three years, (the 31 of December of 2001 in the Congress of the Nation, when assuming like President of the Nation, Adolph Rodriguez Saá announced that Argentina left of pagar bonos by USS 81,800) the bond possesors in default will be able to exchange them by new titles, with an effective acquittal that goes up to around the 65 percent. If a high adhesion is obtained, it will consider itself that the country will have left the cessation of payments. The interested ones will be able to make consultations by Internet in the www.georgesonshareholder.com/argentina page In Argentina, the institutional investors will be able to call to the 0800-444-2111, and the retailers, to the 0800-444-2333, of Monday through Friday from 9 to 18, as of the next Friday. Four centers of calls in the outside will work, in Italy, Germany, Canada and Australia. The term to enter the exchange of titles lasts from Friday 14 of January of 2005 to 25 the February of 2005. Still lack that the process is authorized by the regulatory authorities of Japan. Some questions: The acquittal that the Government proposes is of the 75 percent? In last June, the Government formulated the second and definitive proposal, as soon as in the last altered months, that consist of an acquittal of the nominal value of the 49 to the 53 percent. If the acceptance of the supply surpasses 70% of the owed capital, the liabilities will be reduced of USS 81,800 million to 41,800 million. If it adheres less of 70%, will lower to 38,500 million. One is an incentive so that more bondholders participate. In terms of net present value, the analysts calculate that the acquittal oscillates between the 63 and the 65 percent. What will pass with the interests and the terms of the original debt? One offers a substantial reduction of the interests, an extension of the terms and a period of grace, that is to say, during years coupons will be only paid and the capital will not be amortized. What will happen with the interests of the bonds in default that won from the cessation of payments? The Government does not recognize them and, therefore, he will not pay them none. Which are the unpaid bonds that enter the exchange? There is a list of 152 titles, that the bondholder can consult in her agency of Stock market, its bank or the Web and the telephones that the Government arranged. The bonds were excluded from the reconstruction Pro 7 (Funding bonds in National Currency, fourth series), PRE the 5 (Funding bonds of Previsionales Debts in National Currency, third series) and Certificates of Cre'dito Fiscal (CCF). What titles are offered in exchange for which they were let pay? They are three: the Pair, the Discount and the Even Cuasi. The first two will be emitted in adjustable weights by the Coefficient of Stabilization of Reference (CER, similar to the inflation), in dollars, euros and yens, according to chooses the bondholder. The Even Cuasi will be only in adjustable weights by CER. The bondholder will be able to request that they exchange his titles to him by one of the offered ones, by two of them or a combination of the three, but allocation mechanisms exist that limit the access Par and Even Cuasi. How much it is worth the Pair? The Pair, designed for the small investors, does not imply any acquittal of the nominal value. He is the one that offers less interests, a term of 35 years and a period of grace of 25. The Pair will not include capital acquittals. They will be emitted in dollars, weights, euros and yens. They will have a term of payment of 35 years. The interests will be increasing: of 1.33% during the first five years, of 2.50% between year 6 and the 15 from its emission, of 3.75% of year 16 to the 25, and of 5.25% in ahead. The payments of the amortization will be semester and equal. How much it is worth the Discount? It is the title prepared for the institutional investors. He is the one that implies a greater acquittal, of 66.3%, but also he is the one of smaller term (30 years), the one of smaller period of grace (20 years) and the one of more interests. The Discount (Discount) will imply an acquittal of 66.3% on the nominal value of the papers in default. They will be emitted in dollars, weights, euros and yens. They will have a term of payment of 30 years. They will pay interests of annual 8.28%, although until year 10 a part of the coupon will be paid with new papers and the other will be settled with cash. The payments of the amortization will be semester and equal. How much it is worth the Even Cuasi? Designed in accordance with the AFJP, it implies an acquittal of the 30.1 percent. He is the one of greater term (42 years) and period of grace (32 years). The interest is of 3.31% more CER. The Cuasipar will undergo a nominal acquittal of 30,1%. They will be emitted in weights. Its term of payment will be of 42 years. They will pay an annual interest rate of 3.31%, to which the adjustment of the capital via CER will be added (the coefficient of stabilization of reference that follows the evolution of the retail inflation). The coupon of 3.31% will be capitalized during the first ten years. The payments of the amortization will be semester. How is accepted the supply? The bondholder will have to concur to the branch of her bank or its stock-exchange agency. In the organizations, she will have herself a connected system to the Box of Values, that will inform into all the bonds which it has the interested one. The creditor will complete and sign a form in which he will choose bonds and the currency in which they will emit themselves. The new titles will credit through the bank or agency. How is rejected the supply? The form of acceptance of the supply will not have to subscribe. Therefore, it is not required to go to any organization to show the rejection. What happens if it does not enter the exchange? Economy noticed that it does not contemplate future payments to those who do not accept the supply. Investor can to hope potential improvement of payment (he speculates on himself that he could happen if the acceptance level is under) or try to receive by means of a judicial demand. There will be some additional incentive for the exchange? To all the possesors who adhere to the proposal they will give the denominated tie units to the GIP, that will go being repurchased by the State as the economy grows beforehand over the established guidelines. It is to say that if in a year the GIP expands over certain projection, the state treasury will destine until a 5% of that difference to the repurchase of these titles. As the resources available to pay the services (I interest) of the reconstructed national debt calculated assuming an acceptance of the 100% of the bondholders, in case that the participation level is smaller the surplus of used money will not be destined during 6 years to the repurchase in cash of the new titles.

Some explanations on the exchange of the debt

(Translated automatically by Google)

After more than three years, (the 31 of December of 2001 in the Congress of the Nation, when assuming like President of the Nation, Adolph Rodriguez Saá announced that Argentina left of pagar bonos by USS 81,800) the bond possesors in default will be able to exchange them by new titles, with an effective acquittal that goes up to around the 65 percent.

If a high adhesion is obtained, it will consider itself that the country will have left the cessation of payments.

The interested ones will be able to make consultations by Internet in the www.georgesonshareholder.com/argentina page In Argentina, the institutional investors will be able to call to the 0800-444-2111, and the retailers, to the 0800-444-2333, of Monday through Friday from 9 to 18, as of the next Friday.

Four centers of calls in the outside will work, in Italy, Germany, Canada and Australia.

The term to enter the exchange of titles lasts from Friday 14 of January of 2005 to 25 the February of 2005.

Still lack that the process is authorized by the regulatory authorities of Japan.

Some questions:

The acquittal that the Government proposes is of the 75 percent?

In last June, the Government formulated the second and definitive proposal, as soon as in the last altered months, that consist of an acquittal of the nominal value of the 49 to the 53 percent.

If the acceptance of the supply surpasses 70% of the owed capital, the liabilities will be reduced of USS 81,800 million to 41,800 million.

If it adheres less of 70%, will lower to 38,500 million.

One is an incentive so that more bondholders participate.

In terms of net present value, the analysts calculate that the acquittal oscillates between the 63 and the 65 percent.

What will pass with the interests and the terms of the original debt?

One offers a substantial reduction of the interests, an extension of the terms and a period of grace, that is to say, during years coupons will be only paid and the capital will not be amortized.

What will happen with the interests of the bonds in default that won from the cessation of payments?

The Government does not recognize them and, therefore, he will not pay them none.

Which are the unpaid bonds that enter the exchange?

There is a list of 152 titles, that the bondholder can consult in her agency of Stock market, its bank or the Web and the telephones that the Government arranged.

The bonds were excluded from the reconstruction Pro 7 (Funding bonds in National Currency, fourth series), PRE the 5 (Funding bonds of Previsionales Debts in National Currency, third series) and Certificates of Credito Fiscal (CCF).

What titles are offered in exchange for which they were let pay?

They are three: the Pair, the Discount and the Even Cuasi.

The first two will be emitted in adjustable weights by the Coefficient of Stabilization of Reference (CER, similar to the inflation), in dollars, euros and yens, according to chooses the bondholder.

The Even Cuasi will be only in adjustable weights by CER.

The bondholder will be able to request that they exchange his titles to him by one of the offered ones, by two of them or a combination of the three, but allocation mechanisms exist that limit the access Par and Even Cuasi.

How much it is worth the Pair?

The Pair, designed for the small investors, does not imply any acquittal of the nominal value.

He is the one that offers less interests, a term of 35 years and a period of grace of 25.

The Pair will not include capital acquittals.

They will be emitted in dollars, weights, euros and yens.

They will have a term of payment of 35 years.

The interests will be increasing: of 1.33% during the first five years, of 2.50% between year 6 and the 15 from its emission, of 3.75% of year 16 to the 25, and of 5.25% in ahead.

The payments of the amortization will be semester and equal.

How much it is worth the Discount?

It is the title prepared for the institutional investors.

He is the one that implies a greater acquittal, of 66.3%, but also he is the one of smaller term (30 years), the one of smaller period of grace (20 years) and the one of more interests.

The Discount (Discount) will imply an acquittal of 66.3% on the nominal value of the papers in default.

They will be emitted in dollars, weights, euros and yens.

They will have a term of payment of 30 years.

They will pay interests of annual 8.28%, although until year 10 a part of the coupon will be paid with new papers and the other will be settled with cash.

The payments of the amortization will be semester and equal.

How much it is worth the Even Cuasi?

Designed in accordance with the AFJP, it implies an acquittal of the 30.1 percent.

He is the one of greater term (42 years) and period of grace (32 years).

The interest is of 3.31% more CER.

The Cuasipar will undergo a nominal acquittal of 30,1%.

They will be emitted in weights.

Its term of payment will be of 42 years.

They will pay an annual interest rate of 3.31%, to which the adjustment of the capital via CER will be added (the coefficient of stabilization of reference that follows the evolution of the retail inflation).

The coupon of 3.31% will be capitalized during the first ten years.

The payments of the amortization will be semester. How is accepted the supply? The bondholder will have to concur to the branch of her bank or its stock-exchange agency.

In the organizations, she will have herself a connected system to the Box of Values, that will inform into all the bonds which it has the interested one.

The creditor will complete and sign a form in which he will choose bonds and the currency in which they will emit themselves.

The new titles will credit through the bank or agency.

How is rejected the supply?

The form of acceptance of the supply will not have to subscribe.

Therefore, it is not required to go to any organization to show the rejection.

What happens if it does not enter the exchange?

Economy noticed that it does not contemplate future payments to those who do not accept the supply.

Investor can to hope potential improvement of payment (he speculates on himself that he could happen if the acceptance level is under) or try to receive by means of a judicial demand.

There will be some additional incentive for the exchange?

To all the possesors who adhere to the proposal they will give the denominated tie units to the GIP, that will go being repurchased by the State as the economy grows beforehand over the established guidelines.

It is to say that if in a year the GIP expands over certain projection, the state treasury will destine until a 5% of that difference to the repurchase of these titles.

As the resources available to pay the services (I interest) of the reconstructed national debt calculated assuming an acceptance of the 100% of the bondholders, in case that the participation level is smaller the surplus of used money will not be destined during 6 years to the repurchase in cash of the new titles.