Argentina will launch a swap of 8.3 billion pesos (US$2.15 billion) in short-term inflation-indexed bonds today and it will close on September 7, the Argentine Economy Ministry said yesterday.

The Argentine government is looking to swap the controversial inflation-indexed CER bonds for a reopened 2014 bond as it seeks to ease a financing crunch by extending maturities.

A third of Argentine debt is linked to inflation, and economic analysts and opposition politicians accuse the government of underreporting consumer price data to save money on payments.

The swap will include Pre-9 and PR12 paper, which can be exchanged for Bocan 14 bonds paying on a bank market-based interest rate plus 275 basis points, the Economy Ministry said in a statement.

A ministry source has said if the swap was successful, additional tranches for up to US$6 billion in inflation-indexed debt will follow.

Boudou described the debt swap offer as a small step toward Argentina’s return to global credit markets from which it has been excluded since a massive 2002 default.

In other bond news, journalist and former lawmaker candidate Guillermo Cherasny filed a suit before a federal court charging Boudou and Finance Secretary Hernán Lorenzino with alleged “malfeasance and failure to properly fulfill public duty” on the announced debt swap. Cherasny said the bonds targetted — Bocam 2014 — to replace 2012 maturities will pay 13.25-percent interest, up from 9.0 percent as paid on current paper.

some bondholders ’enemies’. Argentina must distinguish between speculators in its defaulted debt and other bondholders who regret rejecting a 2005 debt restructuring when it tackles the issue of “holdout creditors,” Boudou also said yesterday.

Since taking office in July, he has said repeatedly his priority is returning Argentina to global credit markets from which it has been virtually excluded due to fallout from its huge 2002 default. That is partly due to the threat of lawsuits by the so-called holdouts, which hold about US$29 billion in defaulted bonds, including past due interest, and refused to accept a dramatic capital reduction in the 2005 swap.

“We need to distinguish between those who are Argentina’s enemies, the vulture funds, from those bondholders who didn’t enter the previous swap and might be thinking they made a mistake,” Boudou was quoted as saying by state news agency Télam.

CÓRDOBA HEATS UP. Córdoba Governor Juan Schiaretti yesterday warned he would declare a state of emergency next month unless the federal state “meets its legal obligations and (federal revenue sharing) agreements with the province” as teachers and civil servants stage a walkout today.

“If the national government persists in discriminating against Córdoba” by not sending us over 370 million pesos — a month’s worth of provincial civil servants’ wages — we’ll have but to declare the emergency,” he said. Schiaretti denied he was considering issuing quasi-currency.

But Boudou downplayed Schiaretti’s warning, saying the federal government considered “the whole picture” at analyzing provincial finances: “It’s just not fair that we should always come up with solutions for those in deepest troubles, like Córdoba which has always shown to be in poor shape.”

MONOTRIBUTO. In related news, the Economy Ministry is ironing out the last details of the planned increase in invoicing brackets in the self-employed worker system — monotributo — and plans to put the plan before President Cristina Fernández de Kirchner, Boudou revealed yesterday. “We’re working so the President gets the plan and can send it to Congress shortly,” Boudou said.

The plan is believed to include an increase in maximum yearly invoicing from 72,000 pesos for professionals and from 144,000 pesos to 300,000 pesos for other activities. Self-employed taxpayers’ social security contributions are also under review.

CAPITAL WHITEWASH. No extension. Argentina’s top taxman yesterday said the government does not plan to extend the August 31 deadline for repatriation of offshore funds and labour normalization, which it dubbed a capital whitewash. Revenue Service (AFIP) Director Ricardo Echegaray said 112,000 taxpayers had made voluntary presentations for equity regularization while 313,000 workers were formally registered.

DyN-Reuters