Argentina has formally announced its intention to settle the debts of the $23bn of “holdouts” from its 2005 forced renegotiation (whose debt is nominally now $29bn including interest). It has received an offer from Barclays, Citigroup and Deutsche Bank on behalf of the “holdouts”. The deal is believed to involve at least $1bn in new money for Argentina, for which bonds would be issued with a coupon below 10%. Argentina’s finance minister Amado Boudou said he expected at least 60% acceptance; the three sponsoring banks are believed to control around 40% of the holdouts. The first step is a bill to be presented to the Argentine Congress October 26 repealing the “ley cerrojo” by which negotiation with the holdouts is prohibited.

Such a settlement would open the door to Argentina re-entering the international capotal markets. Boudou announced October 23 that the government intended to sell bonds before the end of the year.

Argentina’s official inflation as reported by the INDEC statistics agency was 6.2% in the year to September; outside analysts estimate the figure at 14%. Boudou has promised to restore credibility to official inflation statistics, which have been severely questioned since January 2007.

Argentina defaulted on international debt in 1828, 1890 and 1982 before its 2001 default, and had several other near-misses.