Argentine Central Bank Close to $1 Billion Loan, Report Says

Argentina’s central bank may be close to securing a $1 billion loan from Goldman Sachs Group Inc. to rebuild reserves that are at a seven-year low, Pagina/12 reported today.

The loan would be for two years at a 6.5 percent annual interest rate, the Buenos Aires-based newspaper said, citing an unidentified government official. It could pave the way for a larger facility of as much as $5 billion to settle holdout creditors’ claims, the story also said.

The Economy Ministry acknowledged today being approached by banks.

“Argentina has received many offers to issue debt from financial institutions,” Jesica Rey, Economy Minister Axel Kicillof’s spokeswoman, said in an e-mail statement. “Argentina hasn’t signed any deal yet” and “will provide details if it signs a debt deal.”

Michael DuVally, a spokesman for New York-based Goldman Sachs, declined to comment in a telephone interview. Jose Olivero, a spokesman for Central Bank president Juan Carlos Fabrega, didn’t reply to a call and an e-mail seeking comment.

Repair Relations

Locked out of international debt markets since its record $95 billion default in 2001, President Cristina Fernandez de Kirchner’s government is seeking to repair relations with the International Monetary Fund, World Bank and the Paris Club to obtain new financing. Fernandez also agreed to compensate Repsol SA for the expropriation of its 51 percent stake in energy producer YPF SA.

Reserves stood at $27.1 billion on March 28.

About 93 percent of creditors accepted losses of 70 cents on the dollar in the nation’s 2005 and 2010 debt restructurings. Holdout investors, including Paul Singer’s Elliott Management Corp., have sued for full repayment.

Argentina has appealed to the U.S. Supreme Court a lower court ruling that blocks the country from making payments to restructured bondholders without settling the $1.5 billion claim from those holding out.

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