424B5 1 roa-424b5_0428.htm Unassociated Document
 
 
PROSPECTUS SUPPLEMENT
(to Prospectus dated April 13, 2010)
 Filed pursuant to Rule 424(b)(5)
Registration No. 333-163784
 

 
The Republic of Argentina
Invites the Owners of each Series of Bonds
listed in Annexes A-1 and A-2 and related claims (collectively, the “Eligible Securities”) to submit offers
to exchange Eligible Securities for New Securities and, in certain cases, cash, on the terms and conditions described herein.
The aggregate Eligible Amount (as defined herein) of all Pre-2005 Eligible Securities (as defined herein) currently outstanding is U.S.$18.3 billion, comprising U.S.$17.6 billion of principal and U.S.$0.7 billion of accrued but unpaid interest as of December 31, 2001, based on currency exchange rates in effect on December 31, 2003.
 
For a discussion of risk factors that you should consider in evaluating the Invitation, see “Risk Factors” beginning on page S-53 of this document and page 7 of the accompanying prospectus.
 
The Invitation will expire at 5:00 P.M. (New York City time) on June 7, 2010, unless extended or earlier terminated by Argentina (such date and time, as the same may be extended, the “Expiration Date”).
Large Holders (as defined herein) electing the Discount Option (as defined herein) who validly tender their Eligible Securities (1) by no later than 5:00 P.M. (New York City time) on May 12, 2010, unless extended (such date and time, as the same may be extended, the “Early Tender Deadline”) will be eligible to receive the Total Consideration (as defined herein), or (2) after the Early Tender Deadline but on or prior to the Expiration Date, will be eligible to receive the Consideration (as defined herein).  Small Holders (as defined herein) will be eligible to receive the Total Consideration even if their tenders are received after the Early Tender Deadline, so long as they validly tender their Eligible Securities on or prior to the Expiration Date.
All tenders will be irrevocable and may not be withdrawn except under certain limited circumstances as described in this document.

The New Securities, other than those governed by Argentine law, will contain provisions regarding acceleration (if applicable) and future modifications to their terms.  These provisions, which are commonly referred to as “collective action clauses,” are described in the sections entitled “Description of the Securities—Default and Acceleration of Maturity” and “Description of the Securities—Collective Action Clauses” on pages 20 and 21, respectively, of the accompanying prospectus. Under those provisions, modifications affecting certain reserved matters, including modifications to payment and other important terms, may be made to a single series of New Securities, other than those governed by Argentine law, with the consent of the holders of 75% of the aggregate principal or notional amount outstanding of that series, and to multiple series of New Securities, other than those governed by Argentine law, with the consent of the holders of 85% of the aggregate principal or notional amount outstanding of all affected series and 66⅔% in aggregate principal or notional amount outstanding of each affected series.

This document, the accompanying prospectus and the related electronic acceptance notices and letters of transmittal are together referred to as the “Invitation Materials.”  The transactions contemplated by the Invitation Materials are referred to as the “Invitation.”

Prior to the termination of the Invitation, Argentina is offering U.S.$1,000,000,000 principal amount of global bonds due 2017 for cash. We refer to this offering as the “concurrent cash offering.”  The completion of the Invitation is conditioned on Argentina’s receipt of the proceeds from the concurrent cash offering and the other conditions described herein.

Application has been made to list each series of the New Securities on the Luxembourg Stock Exchange and to have the New Securities admitted to trading on the Euro MTF market of the Luxembourg Stock Exchange, and application will be made to list each series of the New Securities on the Buenos Aires Stock Exchange and to have the New Securities admitted to trading on the Mercado Abierto Electrónico.  See “Plan of Distribution.”

Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus supplement or the prospectus to which it relates.  Any representation to the contrary is a criminal offense.
 (cover continues on next page)
——————————————————
Global Coordinator
 
Barclays Capital
 
International Joint Dealer Managers
 
Barclays Capital
Citi
Deutsche Bank Securities
 
The date of this prospectus supplement is April 28, 2010.

 
 

 
(cover page continued)

If you own Pre-2005 Eligible Securities, you can elect to receive either of the following combinations of New Securities and, in the case of the Par Option, a cash payment, which we refer to as the “Discount Option” and the “Par Option,” respectively:

Discount Option
Par Option
Discounts
2017 Globals and
GDP-linked Securities
Pars
Cash Payment and
GDP-linked Securities

If you own 2005 Eligible Securities, the New Securities that you receive will be a function of the option that you elect (the Discount Option or the Par Option).  You will not receive any 2017 Globals, cash payment or GDP-linked Securities in the Invitation.

Series of 2005 Eligible
 Securities Exchanged
New Securities
in Discount Option
New Securities
in Par Option
2005 Discounts
Discounts
Pars
2005 Pars
Discounts
Pars
2005 Quasi-Pars
Discounts
Pars

You may elect the Par Option for up to U.S.$50,000, €40,000, ₤30,000, Sfr.60,000, ¥5,000,000 or Ps. 150,000, as the case may be, in outstanding principal amount of each series of Pre-2005 Eligible Securities or in Eligible Amount of each series of 2005 Eligible Securities that you hold, but not more.  We call this limit the “Par Option Limit per Holder.”  In addition, Argentina will not issue more than U.S.$2 billion (or its equivalent in other currencies) of Pars pursuant to the Invitation and, therefore, tenders of Eligible Securities electing the Par Option may be subject to proration.  To the extent that a tender of Eligible Securities electing the Par Option is prorated, it will be reallocated to the Discount Option.

A “series” of Eligible Securities refers to each issue of Eligible Securities listed in Annexes A-1 and A-2 to this document, all accrued interest thereon and all claims or judgments relating to Eligible Securities of that series.  A “series” of New Securities refers to each issue of Discounts, Pars, 2017 Globals and GDP-linked Securities described in this document.

If you hold your Eligible Securities through a financial institution or intermediary, you may need to contact your financial institution or intermediary in order to tender your Eligible Securities.  Financial institutions or intermediaries may impose their own deadlines for instructions to be received from investors in the Eligible Securities with respect to the Invitation, which may be earlier than the Early Tender Deadline and Expiration Date for the Invitation set out above.  Investors holding the Eligible Securities through financial institutions or intermediaries should therefore contact their financial institutions or intermediaries to ensure that they successfully tender their Eligible Securities.

If your tendered Eligible Securities are the subject of a pending administrative, litigation, arbitral or other legal proceeding against Argentina or you have obtained or obtain in the future a payment order, judgment, arbitral award or other such order against Argentina in respect of your tendered Eligible Securities, then as a condition to your participation in the Invitation, you will be required to agree to terminate any legal proceeding against Argentina in respect of your tendered Eligible Securities, release Argentina from all claims, including any administrative, litigation or arbitral claims, and take extra steps and procedures in order to participate in the Invitation, as set out herein.  The exchange will constitute full performance and satisfaction by Argentina of any payment order, judgment, arbitral award or other such order you have obtained, or may obtain in the future, against Argentina in respect of your tendered Eligible Securities.

In this document, references to “we,” “our” and “us” are to the Republic of Argentina, or “Argentina.”  References to “you” or “your” are to holders of Eligible Securities.

This document does not constitute an offer to tender, or the solicitation of an offer to tender, securities in any jurisdiction where such offer or solicitation is unlawful.  The distribution of this document in certain jurisdictions may be restricted by law, and persons into whose possession this document comes are requested to inform themselves about and to observe such restrictions.

The information agent for the Invitation is Georgeson S.r.l., which may be reached at the address and telephone number specified on the back cover of this document.  The information agent will operate the Invitation Website (as defined herein), accept letters of transmittal in electronic form from tendering holders and answer questions from holders regarding tender procedures.

     

 
- ii -

 

TABLE OF CONTENTS
 
Prospectus Supplement
Page               
 
 
Annex A–1 –  Pre-2005 Eligible Securities A-1
Annex A–2 –  2005 Eligible Securities A-2
Annex BPrincipal Payment Schedule for U.S. dollar-denominated Discounts and Pars  B-1
Annex C–1  Pre-2005 Eligible Securities:  Additional Information C-1
Annex C–2  2005 Eligible Securities:  Additional Information  C-2
Annex D – Interest Payments on 2005 Discounts and 2005 Pars and Capitalized Interest on Discounts  D-1
Annex E–1 – Tender Procedures:  Eligible Securities Held by a Direct Participant  E-1
Annex E–2 Tender Procedures:  Eligible Securities Held through a Securities Intermediary  E-2
Annex F–1 Sample Calculations of Total Consideration and Consideration for Pre-2005 Eligible Securities
F-1
Annex F–2 Sample Calculations of Total Consideration and Consideration for 2005 Eligible Securities F-3
Annex G – Sample Calculations Related to Payments on GDP-linked Securities G-1
Annex H – Form of Letter of Transmittal H-1
 
Prospectus
 
 
     

 
- iii -

 
 
We are responsible for the information contained in this document and the documents incorporated herein by reference.  We have not authorized anyone to give you any other information, and we take no responsibility for any other information that others may give you.  Neither the delivery of this document nor any exchange made hereunder shall, under any circumstances, create any implication that there has been no change in our condition since the date of this document.
 
Argentina is furnishing this document to you solely for use in the context of the Invitation and for Luxembourg listing purposes.
 
Argentina is a foreign sovereign state.  Consequently, it may be difficult for you to obtain or realize upon judgments of courts or arbitral awards in the United States and other jurisdictions against Argentina.
 
The New Securities that Argentina issues to tendering holders of Eligible Securities in the United States are being offered under Argentina’s registration statement (file no. 333-163784) initially filed with the United States Securities and Exchange Commission (the “SEC”) under Schedule B of the Securities Act of 1933, as amended (the “Securities Act”), on December 16, 2009, and declared effective by the SEC on April 13, 2010.
 
The accompanying prospectus provides you with a general description of the securities that Argentina may offer under its registration statement, and this document contains specific information about the terms of the Invitation and the New Securities.  This document also adds, updates or changes information provided in the accompanying prospectus.  Consequently, before you participate in the Invitation, you should read this document, the accompanying prospectus and the Annual Report, together with the documents incorporated by reference and described under “Incorporation by Reference” and “General Information—Where You Can Find More Information” in this document.
 
None of Argentina, the global coordinator, any international joint dealer manager, the information agent or the exchange agent has expressed any opinion as to whether the terms of the Invitation are fair.  In addition, none of the clearing systems through which you may tender your Eligible Securities has expressed any opinion as to whether the terms of the Invitation are fair.  None of Argentina, the global coordinator, any international joint dealer manager, the information agent or the exchange agent makes any recommendation that you tender your Eligible Securities for exchange or refrain from doing so pursuant to the Invitation, and no one has been authorized by Argentina, any international joint dealer manager, the information agent or the exchange agent to make any such recommendation.  You must make your own decision as to whether to tender Eligible Securities in exchange for New Securities or refrain from doing so, and, if you do tender Eligible Securities, the principal amount of Eligible Securities to tender and which of the Discount Option or the Par Option to elect.
 
All references in this document to the website relating to the Invitation (which we refer to as the “Invitation Website”), are to the website created and maintained by the information agent, which can be accessed through the Internet address http://www.argentina2010offer.com.  These references are inserted as inactive textual references to this “uniform resource locator” or “URL” and are for your informational reference only.  Access to the Invitation Website by holders in certain non-U.S. jurisdictions will be subject to certain restrictions in compliance with exemptions from regulatory approval being relied on by Argentina in such jurisdictions.  See “Jurisdictional Restrictions” below.  Information on the Invitation Website is not incorporated by reference in this document.  Argentina does not assume responsibility for the information that appears on the Invitation Website, other than the Invitation Materials and other information that Argentina has authorized for display on the Invitation Website under the information agent agreement.
 

     

 
- iv -

 

INCORPORATION BY REFERENCE
 
The SEC allows Argentina to incorporate by reference some information that Argentina files with the SEC.  Argentina can disclose important information to you by referring to these documents.  The following documents are considered a part of and incorporated by reference in this document and the accompanying prospectus:
 
·  
Amendment No. 4 to Argentina’s Annual Report on Form 18-K/A for the year ended December 31, 2008 (which includes certain information updated as of December 31, 2009), as filed with the SEC on April 9, 2010, SEC file no. 033-70734 and
 
·  
each amendment to the Annual Report on Form 18-K/A, and each subsequent Annual Report on Form 18-K and any amendment thereto on Form 18-K/A, filed on or after the date of this document and before the Expiration Date.
 
We refer to Amendment No. 4 to Argentina’s Annual Report as the “Annual Report.”  Information that Argentina files with the SEC in the form of any amendment to the Annual Report on Form 18-K/A, any subsequent Annual Report on Form 18-K and any amendment thereto on Form 18-K/A filed on or after the date of this document and before the Expiration Date will update and supersede earlier information that it has filed.
 
You can request copies of these documents, upon payment of a duplicating fee, by writing to the SEC.  You may also read and copy these documents at the SEC’s public reference room in Washington, D.C.:
 
100 F Street, N.E.
Washington, D.C. 20549
 
Please call the SEC at 1-800-SEC-0330 for further information.  In addition, electronic SEC filings of Argentina are available to the public over the Internet at the SEC’s website at http://www.sec.gov.
 
GLOBAL OFFERING
 
The Invitation is being extended to holders of Eligible Securities in the United States on the basis of this document and the accompanying prospectus, and in Luxembourg and certain Member States of the European Economic Area (each, a “Member State”) that have implemented the Prospectus Directive (Directive 2003/71/EC) (each, a “Relevant Member State”) on the basis of a separate prospectus dated April 27, 2010 (the “PD Prospectus”).  The Invitation will only be made in Italy in accordance with a separate offer document that is approved by CONSOB pursuant to Article 102 Legislative Decree No. 58 of February 24, 1998 (the “Italian Offer Document”).  The Invitation is also being extended on the basis of this document and the accompanying prospectus, or on the basis of the PD Prospectus, in certain jurisdictions where Argentina and the international joint dealer managers are relying on exemptions from regulatory approval by the relevant authorities.
 
The Invitation being extended under this document and the accompanying prospectus, the invitations being extended on the basis of the PD Prospectus and the Italian Offer Document constitute one and the same Invitation, subject to the same terms and conditions (as set forth in this document), except as required by applicable law or as otherwise noted in this document.
 
The Invitation is only being extended where offers and solicitations are permitted by law, and only in accordance with the applicable laws, rules and regulations of the relevant jurisdiction.
 
No action has been or will be taken in any jurisdiction (except the United States and, subject to certain conditions, Argentina, Austria, Germany, Italy, Luxembourg, the Netherlands, Spain, Switzerland and the United Kingdom) that would permit a public offering of the New Securities, or the possession, circulation or distribution of this document, the PD Prospectus or any Invitation Materials where action for that purpose is required.  Accordingly, the New Securities may not be offered, sold or exchanged, directly or indirectly, and neither this document, the PD Prospectus, the Italian Offer Document nor any other offering material or advertisement in connection with the Invitation may be distributed or published, in or from any such jurisdiction, except in compliance with any applicable rules or regulations of any such country or jurisdiction.  A holder outside the United States may participate in the Invitation only as provided under “Jurisdictional Restrictions.”
 
 
- v -

 
The Invitation follows the submission to Argentina in September 2008 by the Global Coordinator and Arcadia Advisors (“Arcadia”) of an initial proposal to implement an exchange of Pre-2005 Eligible Securities.  That proposal was made on behalf of, and on the basis of expressions of interest from, a number of large international institutional holders advised by Arcadia representing a substantial amount of Pre-2005 Eligible Securities (the “Initiating Holders”).  The legal and financial structure underpinning the proposal was originally designed and discussed with one of the largest of the Initiating Holders by Arcadia in January 2008.  Arcadia received additional expressions of interest from other holders of Pre-2005 Eligible Securities and in March 2008, Arcadia invited the Global Coordinator to join in the transaction and agreed to compensation terms on the basis of an exclusive relationship between Arcadia and the Global Coordinator.  That exclusive relationship is still in effect and applies to the revised proposal that the Global Coordinator, submitted to Argentina in October 2009 with respect to Pre-2005 Eligible Securities. Argentina thereafter invited Citigroup Global Markets Inc. and Deutsche Bank Securities Inc. to act as Dealer Managers in conjunction with the Global Coordinator. Arcadia is a financial advisory firm providing merger and acquisition, debt restructuring and capital raising advice.  Arcadia has two partners, Emilio Ocampo and Marcelo Etchebarne, with backgrounds in investment banking and corporate law, respectively.  Mr. Ocampo has 20 years of experience in international finance and was for several years a managing director of Salomon Smith Barney and Morgan Stanley in their New York and London offices, respectively.  He has a degree in economics from the University of Buenos Aires and an MBA from the University of Chicago.  Mr. Etchebarne has extensive experience in local and international capital markets and sovereign debt restructurings. He has law degrees from the Argentine Catholic University and Harvard Law School, is a member of the New York State Bar Association and was an international associate at Simpson Thacher & Bartlett in New York.  Mr. Etchebarne is also a partner of the law firm of Cabanellas, Etchebarne Kelly & Dell'Oro Maini, which is acting as local counsel to the Global Coordinator in connection with the Invitation.
 
 Invitation in Japan
 
The Invitation Materials have not been filed with or approved by the Kanto Local Finance Bureau.  Accordingly, holders of Eligible Securities who are Japanese residents or persons located in Japan who wish to participate in the Invitation should not refer to the Invitation Materials as a source of information or for instructions on how to tender Eligible Securities.  However, a securities registration statement will concurrently be filed with the Kanto Local Finance Bureau and a prospectus in the Japanese language will be prepared in Japan in connection with the offer in Japan.  Residents of Japan holding Eligible Securities who wish to participate in the Invitation should read such disclosure documents, not the Invitation Materials.  See “Jurisdictional Restrictions.”
 
Subject to regulatory approval, Argentina intends to invite holders of certain Japanese yen-denominated securities issued by Argentina (“Samurai Bonds”) to participate in an offer in Japan to occur concurrently with the Invitation or as soon as practicable thereafter, to submit tenders to exchange their Samurai Bonds for new discount bonds due 2033 or par bonds due 2038 denominated in yen, and other new securities, on terms that are substantially the same as those of the Invitation, except that certain series of the new securities will be governed by Japanese law.  We refer to Argentina’s invitation to holders of the Samurai Bonds as the “offer in Japan.”  The details of the offer in Japan will be set forth in a separate prospectus approved by the relevant regulatory authorities in Japan.
 
All calculations for purposes of determining whether the maximum aggregate principal amount of Pars has been reached (as described under “Terms of the Invitation—Limitation on Issuance and Allocation of the Par Option”), will include par bonds due 2038 issued pursuant to the invitation in Japan.  However, no amount of Pars will be specifically reserved for purposes of the offer in Japan.  Accordingly, should the expiration of the offer in Japan not occur close enough to the Expiration Date of the Invitation to determine whether the maximum aggregate principal amount of Pars has been reached, the Par Option might not be available for holders participating in such offer, depending on the demand for Pars pursuant to the Invitation.
 
Similarly, the allocation of the Par Option in accordance with the procedures described under “Terms of the Invitation—Limitation on Issuance and Allocation of the Par Option” will encompass all tenders electing the Par Option submitted in the Invitation and the offer in Japan, in each case after application of the Par Option Limit per Holder (as defined below).
 
 
- vi -

 
CERTAIN LEGAL RESTRICTIONS
 
The distribution of the Invitation Materials and the transactions contemplated by the Invitation Materials are restricted by law in certain jurisdictions.  If the Invitation Materials come into your possession, you are required by Argentina to inform yourself of and to observe all of these restrictions.  The Invitation Materials do not constitute, and may not be used in connection with, an offer or solicitation in any jurisdiction where offers or solicitations are not permitted by law.  Holders of Eligible Securities outside the United States and Luxembourg should carefully review the restrictions and limitations applicable in certain jurisdictions and the manner in which the Invitation Materials will be made available in such jurisdictions, as set forth under “Jurisdictional Restrictions.”
 
If a jurisdiction requires that the Invitation be made by a licensed broker or dealer and any international joint dealer manager or any affiliate of any international joint dealer manager is a licensed broker or dealer in that jurisdiction, the Invitation shall be deemed to be made by such international joint dealer manager or such affiliate on behalf of Argentina in that jurisdiction.
 
Until 40 days after the Early Announcement Date (as defined in “Summary—Summary Time Schedule for the Invitation”), all dealers effecting transactions in the New Securities in the United States, whether or not participating in this distribution, may be required to deliver a copy of this document and the accompanying prospectus.
 

     

 
- vii -

 

CURRENCY EXCHANGE RATES
 
Several calculations relating to the Invitation will be performed using currency exchange rates in effect on December 31, 2003, which we refer to as, in each case, the FX Rate 2003, while other calculations relating to the Invitation will be performed using currency exchange rates in effect on April 21, 2010, which we refer to, in each case, as the FX Rate Launch, or currency exchange rates in effect on the FX Determination Date (as defined below), which we refer to, in each case, as the FX Rate 2010.
 
FX Rate 2003 and FX Rate Launch
 
The “FX Rate 2003” and “FX Rate Launch” of selected currencies are set forth below:
 
Currency           
FX Rate 2003
 
FX Rate Launch
(Rate per  
U.S. dollar)
 
(Euros per   
currency unit)
 
  (Rate per U.S. dollar) 
Argentine pesos
2.9175
 
 
-
   
3.8671
Swiss francs
1.2409
   
0.6400
   
1.0708
Euro
0.7945
   
-
   
0.7469
Pounds sterling
0.5599
   
1.4190
   
0.6491
Japanese yen
107.3900
   
0.0074
   
93.1300
 
___________
Source:  Thomson Reuters
 
 
___________
Source:  Bloomberg

For purposes of the Invitation, all exchange rates with respect to predecessor currencies to the euro will be calculated by multiplying the relevant euro/U.S. dollar exchange rate by the fixed conversion rate of such predecessor currency into the euro, as set forth in the table below, and rounding the resulting rate to 4 decimal places.
 
    Predecessor Currency   
    Rate per euro   
Deutsche mark
1.95583
Italian lira
1936.2700
Austrian schilling
13.7603
Spanish peseta
166.3860
___________
Source: European Central Bank

FX Rate 2010
 
The “FX Rate 2010” per U.S. dollar for Argentine pesos, Swiss francs, the euro, Pounds sterling and Japanese yen will be determined by the international joint dealer managers based on the bid-side price reported on Bloomberg Page TKC1 (for currencies other than Argentine pesos) and Bloomberg Page TKC14 (for Argentine pesos), or by any recognized quotation source selected by the international joint dealer managers in their sole and absolute discretion if Bloomberg is not available or is manifestly erroneous, at or around 11:00 A.M. (New York City time) on May 13, 2010, the business day after the Early Tender Deadline, or as soon as practicable thereafter, unless Argentina has terminated the Invitation earlier; each such rate will be rounded to 4 decimal places.  We refer to this date as the “FX Determination Date.”  The FX Determination Date may be postponed by Argentina for any reason, including if the Early Tender Period is extended.  The FX Rate 2010 for the conversion of predecessor currencies to the euro into U.S. dollars will be determined by dividing the euro/U.S. dollar FX Rate 2010 by the conversion rate for such predecessor currency set out in the immediately preceding table.  The FX Rate 2010 for the conversion of Swiss francs, pounds sterling and Japanese yen into euro will be determined by dividing the FX Rate 2010 per U.S. dollar for the relevant currency (rounded to 4 decimals, as described above) by the euro/U.S. dollar FX Rate 2010 (rounded to 4 decimals), without further rounding of the resulting quotient.
 


 
 
 

 
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GLOSSARY OF KEY TERMS
 
 
Key Terms of the Invitation Applicable to all Tenders
 
 
The “Brady Bonds” are the Discount USD L + 0.8125% (BR) due 2023; Discount USD L + 0.8125% (RG) due 2023; Par Bonds USD 6% (BR) due 2023; Par Bonds USD 6% (RG) due 2023; Discount DEM L + 0.8125% Due 2023; and Par Bonds DEM 5.87% Due 2023.
 
A “business day” is (unless noted otherwise) any day that is not a Saturday or Sunday, and that is not a day on which banking or trust institutions are authorized generally or obligated by law, regulation or executive order to close in New York City or the City of Buenos Aires, and that is also a day on which the Trans-European Automated Real-Time Gross Settlement Express Transfer (TARGET) System, or any successor system, is open for business.
 
The “cash payment” is the amount to be paid in cash by Argentina to holders of Pre-2005 Eligible Securities who elect and are allocated the Par Option, which is being made in respect of interest that would have accrued on the Pars during the period from December 31, 2003 to but excluding September 30, 2009 (including interest paid on September 30, 2009), if they had been outstanding during this period and at the same rate as the 2005 Pars of the applicable series.
 
The “CER” is the Coeficiente de Estabilización de Referencia, a unit of account whose value in pesos is indexed to consumer price inflation in Argentina, as measured by changes in the consumer price index, or “CPI.”  The CER is published by the Central Bank of Argentina on a monthly basis.
 
The “Consideration” is, as applicable, (i) the consideration that you will receive if you elect the Discount Option, are a Large Holder and you tender Pre-2005 Eligible Securities after the Early Tender Deadline, as described under “Terms of the Invitation—Discount Option—Consideration for Tenders After the Early Tender Deadline by Large Holders of Pre-2005 Eligible Securities in Exchange for Discounts” or (ii) the consideration that you will receive if you elect the Discount Option, are a Large Holder and you tender your 2005 Eligible Securities after the Early Tender Deadline, as described under “Terms of the Invitation—Terms of the Invitation Applicable Only to Holders of 2005 Eligible Securities—Consideration for Tenders After the Early Tender Deadline by Large Holders of 2005 Eligible Securities in Exchange for Discounts.”
 
The “Discount Option” is (i) if you are a holder of Pre-2005 Eligible Securities, the combination of Discounts, 2017 Globals and GDP-linked Securities, or (ii) if you are a holder of 2005 Eligible Securities, the Discounts, that in each case you may elect to receive, or be allocated, as part of your consideration in exchange for any Eligible Securities that you tender that are accepted by Argentina.
 
The “Discounts” are the discount bonds due December 2033 denominated in U.S. dollars, euros and pesos to be issued by Argentina pursuant to the Invitation.
 
The “Early Tender Deadline” is 5:00 P.M. (New York City time) on May 12, 2010, the date on which the early tender period ends, unless Argentina extends it.
 
An “electronic acceptance notice” is an electronic acceptance notice to be submitted by a holder of Eligible Securities (if it is a direct participant in the relevant clearing system), or by a financial institution or other intermediary on its behalf, to the principal clearing system through which such holder tenders its Eligible Securities.
 
The “Eligible Amount” in the case of Pre-2005 Eligible Securities, is an amount assigned to your Pre-2005 Eligible Securities intended to represent their outstanding principal amount as of December 31, 2001, plus accrued but unpaid interest thereon up to but excluding December 31, 2001, as specified in Annex C-1 to this document.  In the case of 2005 Eligible Securities, the Eligible Amount is determined by dividing the original principal amount of those 2005 Eligible Securities by the applicable divisor specified in column “B” of Annex C-2 to this document.
 
The “Eligible Securities” are the outstanding securities of Argentina that you may offer to exchange for New Securities pursuant to the Invitation, and include the Pre-2005 Eligible Securities and the 2005 Eligible Securities.
 
 
- ix -

 
 
The “Expiration Date” is June 7, 2010, the date on which the Invitation expires, unless Argentina extends it or terminates the Invitation earlier as provided herein.
 
The “FX Determination Date” is May 13, 2010 (unless Argentina extends it), the date on which the international joint dealer managers determine, and Argentina announces, the FX Rate 2010 for each relevant currency.
 
“FX Rate Launch” is defined above under “Currency Exchange Rates.”
 
“FX Rate 2003” is defined above under “Currency Exchange Rates.”
 
“FX Rate 2010” is defined above under “Currency Exchange Rates.”
 
The “GDP-linked Securities” are the GDP-linked securities expiring no later than December 2035 denominated in U.S. dollars, euros and pesos to be issued by Argentina pursuant to the Invitation.
 
The “Invitation Website” is the website created and maintained by the information agent, which can be accessed through the Internet address http://www.argentina2010offer.com.
 
A “Large Holder” is any holder whose tendered Eligible Securities of all series have, in the aggregate, an outstanding principal amount equal to or greater than U.S.$1,000,000 or the equivalent in other currencies, using the FX Rate Launch.
 
A “letter of transmittal” includes (a) each letter of transmittal, in substantially the form of Annex H to this document, to be completed and submitted to the information agent in electronic form through the Invitation Website, and (b) each paper letter of transmittal to be completed and signed by or on behalf of beneficial owners located in Germany.
 
The “New Securities” are, collectively, the Discounts, the Pars, the 2017 Globals and the GDP-linked Securities to be issued by Argentina pursuant to the Invitation.
 
The “notional amount” of GDP-linked Securities to be issued to a holder of Pre-2005 Eligible Securities tendered and accepted by Argentina in the Invitation will be the Eligible Amount of such Pre-2005 Eligible Securities, or the equivalent thereof in the currency in which such GDP-linked Securities are denominated using the applicable FX Rate 2003.  The notional amount will be used for purposes of calculating the payments, if any, to be made on the GDP-linked securities, but there are no principal payments in respect of the GDP-linked Securities.
 
The “original principal amount” of any Discounts, Pars, 2005 Discounts, 2005 Pars or 2005 Quasi-Pars refers to their original principal amount on their date of issuance without taking into account any adjustments to the principal amount of Discounts, 2005 Discounts or 2005 Quasi-Pars in respect of capitalized interest or any adjustments to the principal amount of 2005 Eligible Securities, Discounts or Pars denominated in Argentine pesos in respect of Argentine inflation based on the CER on or after December 31, 2003.
 
The “Pars” are the par bonds due December 2038 denominated in U.S. dollars, euros and pesos to be issued by Argentina pursuant to the Invitation.
 
The “Par Option” is (i) if you are a holder of Pre-2005 Eligible Securities, the combination of Pars, a cash payment and GDP-linked Securities, or (ii) if you are a holder of 2005 Eligible Securities, the Pars, that in each case you may elect to receive, to the extent that you are allocated Pars as part of your consideration, in exchange for any Eligible Securities that you tender that are accepted by Argentina.
 
The “Par Option Maximum” is U.S.$2 billion or its equivalent in other currencies, using the applicable FX Rate 2010.
 
 
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The “Par Option Limit per Holder” is the limit of U.S.$50,000, €40,000, ₤30,000, Sfr.60,000, ¥5,000,000 or Ps. 150,000, as the case may be, in outstanding principal amount of each series of Pre-2005 Eligible Securities or in Eligible Amount of each series of 2005 Eligible Securities as to which you may elect the Par Option.
 
The “Pre-2005 Eligible Securities” means all Eligible Securities issued prior to January 1, 2005.  The Pre-2005 Eligible Securities are listed in Annex A-1 to this document.  The Pre-2005 Eligible Securities do not include the Brady Bonds.
 
The “principal clearing systems” are the clearing systems through which Eligible Securities may be tendered pursuant to the Invitation.  They are: Caja de Valores S.A., which we refer to as “Caja de Valores, Clearstream Banking AG, Clearstream Banking, société anonyme, which we refer to as “Clearstream, Luxembourg,” Euroclear Bank S.A./N.V., as operator of the Euroclear System, which we refer to as “Euroclear,” Iberclear, Monte Titoli S.p.A., Oesterreichische Kontrollbank AG, which we refer to as “OEKB,” and SIS AG, which we refer to as “SIS”.
 
A “Small Holder” is any holder of Eligible Securities who is not a Large Holder.
 
The “Submission Period” is the period from May 3, 2010 to June 7, 2010 during which the Invitation is open, unless Argentina extends it or terminates the Invitation earlier as provided herein.
 
The “Total Consideration” is, as applicable, (a) the consideration that you will receive if you are (i) a Large Holder and you tender Pre-2005 Eligible Securities prior to the Early Tender Deadline and elect the Discount Option, (ii) a Large Holder and you tender Pre-2005 Eligible Securities and you elect the Par Option but are allocated the Discount Option, or (iii) a Small Holder and you tender Pre-2005 Eligible Securities and you elect or are allocated the Discount Option, as described under “Terms of the Invitation—Discount Option—Total Consideration for Tenders of Pre-2005 Eligible Securities in Exchange for Discounts,” (b) the consideration that you will receive if you elect, and to the extent that you are allocated, the Par Option with respect to any of your Pre-2005 Eligible Securities as described under “Terms of the Invitation—Par Option—Total Consideration for Tenders of Pre-2005 Eligible Securities in Exchange for Pars,” (c) the consideration that you will receive if you are (i) a Large Holder and you tender 2005 Eligible Securities prior to the Early Tender Deadline and you elect the Discount Option, (ii) a Large Holder and you tender 2005 Eligible Securities and you elect the Par Option but are allocated the Discount Option or (iii) a Small Holder and you tender 2005 Eligible Securities and you elect or are allocated the Discount Option, as described under “Terms of the Invitation—Terms of the Invitation Applicable Only to Holders of 2005 Eligible Securities—Total Consideration for Tenders of 2005 Eligible Securities in Exchange for Discounts,” or (d) the consideration that you will receive if you elect, and to the extent that you are allocated, the Par Option with respect to any of your 2005 Eligible Securities, as described under “Terms of the Invitation—Terms of the Invitation Applicable Only to Holders of 2005 Eligible Securities—Total Consideration for Tenders of 2005 Eligible Securities in Exchange for Pars.”
 
The “2005 Discounts” are the discount bonds due December 2033 denominated in U.S. dollars, euros and pesos, each of which is referred to as a separate “series” of 2005 Discounts, issued by Argentina in its 2005 exchange offer and the discount bonds due December 2033 denominated in pesos issued by Argentina for cash subsequent to the 2005 exchange offer.
 
The “2005 Eligible Securities” are, collectively, the 2005 Discounts, 2005 Pars and 2005 Quasi-Pars.  The 2005 Eligible Securities are listed in Annex A-2 to this document.
 
The “2005 GDP-linked Securities” are the GDP-linked securities expiring no later than December 2035 denominated in U.S. dollars, euros or pesos issued by Argentina pursuant to its 2005 exchange offer.
 
The “2005 Pars” are the par bonds due December 2038 denominated in U.S. dollars, euros and pesos, each of which is referred to as a separate “series” of 2005 Pars, issued by Argentina in its 2005 exchange offer.
 
The “Annual Report” is Amendment No. 4 to Argentina’s Annual Report on Form 18-K/A for the year ended December 31, 2008 (which includes certain information updated as of December 31, 2009), as filed with the SEC on April 9, 2010, SEC file no. 033-70734.
 
 
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The “2017 Argentine Law Differential” is 1.36%, which represents the average difference between the yield of the 2005 Discounts denominated in U.S. dollars governed by Argentine law and the yield of the 2005 Discounts denominated in U.S. dollars governed by New York law, during the three-year period ending on February 17, 2010, as calculated by Argentina.
 
The “2017 Globals” are the global bonds due 2017 to be issued by Argentina pursuant to the Invitation.
 
The “2017 Globals Discount Rate,” which may be used to calculate the 2017 Globals Issue Price, means the difference of (x) the interpolation of the mid-market yields of each of the 2017 Globals Reference Securities, calculated on a straight-line basis to the average life of each such security at or around 3:00 P.M. (New York City time) on the business day after the Early Tender Deadline, as determined by Argentina, minus (y) the 2017 Argentine Law Differential (1.36%).
 
The “2017 Globals Issue Price” is the issue price (expressed as a decimal) of the global bonds due 2017 sold in the concurrent cash offering or, if Argentina does not sell global bonds due 2017 in the concurrent cash offering and waives the Financing Condition, the price (expressed as a decimal) of the 2017 Globals resulting from the calculation by Argentina of the sum of the present values of all scheduled interest and principal payments of the 2017 Globals, discounted to the Early Settlement Date using the 2017 Globals Discount Rate, and rounded, if necessary, to 4 decimal places.
 
The “2017 Globals Reference Securities” are the Bonar VII Bond due September 12, 2013 and the Bonar X Bond due April 17, 2017.
 
The “2017 Globals Maturity Date” will be on or about the seventh anniversary of the Early Settlement Date.
 
Key Terms of the Invitation Applicable Only to Tenders of 2005 Eligible Securities
 
The “Deemed Reinvestment Rate” means, for each Reinvestment Period, (i) with respect to the reinvestment of payments received in U.S. dollars, the London interbank offered rate for six-month deposits in U.S. dollars (“LIBOR”), as shown on “Bloomberg US006M Index <GO>”, (ii) with respect to the reinvestment of payments received in euro, the six-month EURIBOR rate, as shown on “Bloomberg EU0006M Index <GO>”, or (iii) with respect to the reinvestment of payments received in pesos, the rate for one-month deposits in pesos in an amount greater than Ps. 1.0 million (“BADLAR”), as shown on “Bloomberg BADLARP Index <GO>”, in each case on the first day of such Reinvestment Period.
 
“Reinvestment Period” means, with respect to any payment of interest on 2005 Discounts or 2005 Pars or any payment on the 2005 GDP-linked Securities, the period beginning on and including the date on which such payment was due to be made and ending on but excluding the date falling six months thereafter, and each subsequent period beginning on and including the last day of the previous Reinvestment Period and ending on but excluding the date falling six months thereafter.  The final Reinvestment Period for each such payment shall end on but exclude December 31, 2009.
 
The “2005 Eligible Securities Price Determination Procedure” is the procedure by which the exchange agent will calculate, and Argentina will confirm, the 2005 Discounts Trading Price and 2005 Pars Trading Price, based on quotations received by Argentina, which in turn will be based on quotations received from five leading international securities dealers selected by Argentina (but excluding the international joint dealer managers) for the bid and offer prices of such securities, at the designated time on the designated day, such quoted price to be expressed as a percentage of the original principal amount of such securities and to include any amount payable in respect of (i) accrued interest on the 2005 Discounts or 2005 Pars, (ii) the adjustments made to the principal amount of the 2005 Discounts in respect of capitalized interest from December 31, 2003 and (iii) in the case of peso-denominated 2005 Discounts or 2005 Pars, the adjustments made to the principal amount of the 2005 Discounts or 2005 Pars in respect of Argentine inflation, based on the CER, from December 31, 2003. The exchange agent will determine the applicable trading price by calculating the average of the single best (highest) bid price and single best (lowest) offer price from all such quotations (rounding, if necessary, the resulting price to 4 decimal places).
 
 
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The “2005 Discounts Trading Price” is, for each series of 2005 Discounts, the trading price (expressed as a decimal) of the 2005 Discounts of such series denominated in U.S. dollars, euros and pesos, as calculated by the exchange agent using the 2005 Eligible Securities Price Determination Procedure, at or around 3:00 P.M. (New York City time) on the second business day after the Early Tender Deadline.
 
The “2005 Pars Trading Price” is, for each series of 2005 Pars, the trading price (expressed as a decimal) of the 2005 Pars of such series denominated in U.S. dollars, euros and pesos, as calculated by the exchange agent using the 2005 Eligible Securities Price Determination Procedure, at or around 3:00 P.M. (New York City time) on the business day after the Expiration Date.
 
The “2005 Quasi-Pars” are the quasi-par bonds due December 2045 denominated in pesos issued by Argentina in its 2005 exchange offer.
 
 

 

     

 
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This summary highlights information contained elsewhere in this document.  It is not complete and may not contain all the information that you should consider before tendering Eligible Securities in exchange for New Securities.  You should read this document in its entirety, including the “Risk Factors” section, and the accompanying prospectus carefully.
 
Summary Time Schedule for the Invitation
 
The following summarizes the anticipated time schedule for the Invitation assuming, among other things, that the Early Tender Deadline and the Expiration Date are not extended and that the Invitation is not earlier terminated.
 
April 30, 2010
Commencement
 
Invitation commences.  Announcement of the terms of the Invitation.
 
May 3, 2010, through June 7, 2010
Submission Period (unless extended or earlier terminated)
 
The Invitation is open during this period, unless Argentina extends it or terminates it earlier as provided herein.  We refer to this time period as the “Submission Period.”  Tendering holders of Eligible Securities may submit tenders by delivering, or giving instructions for delivery of, electronic acceptance notices and letters of transmittal as described in this document.  Once electronic acceptance notices are submitted, tenders will be irrevocable, except under certain limited circumstances as described in this document.  See “Risk Factors¾Risk Factors Relating to the Invitation¾Risks of Participating in the Invitation,” “Terms of the Invitation¾Irrevocability; Limited Withdrawal Rights” and “Terms of the Invitation¾Tender Procedures.”
 
Argentina has divided the Submission Period into two periods: an early tender period, comprising the first eight business days of the Submission Period (unless extended), and a late tender period, comprising the remainder of the Submission Period.  If you are a Large Holder electing the Discount Option and wish to receive the Total Consideration, your duly completed electronic acceptance notice must be received by the principal clearing system through which you tender your Eligible Securities (which does not include The Depository Trust Company, which we refer to as “DTC”), and a letter of transmittal in electronic form must be received by the information agent, by no later than 5:00 P.M. (New York City time) on May 12, 2010 (unless the early tender period is extended).  We refer to this date and time as the “Early Tender Deadline.”  A Small Holder will be eligible to receive the Total Consideration even if its tender is received after the Early Tender Deadline, so long as the holder (if it is a direct participant in the relevant clearing system), or an intermediary on its behalf, validly submits an electronic acceptance notice and letter of transmittal in electronic form with respect to that tender on or prior to the end of the Submission Period.
 
A “Large Holder” for this purpose and as used elsewhere in this document (unless noted otherwise) is any holder whose tendered Eligible Securities of all series have, in the aggregate, an outstanding principal amount equal to or greater than U.S.$1,000,000 or the equivalent in other currencies, using the applicable FX Rate Launch, and a “Small Holder” is a holder that is not a Large Holder.
 
 
 
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5:00 P.M. (New York City time), May 12, 2010
Early Tender Deadline (unless extended)
 
The early tender period ends, unless Argentina extends it.  If you are a Large Holder electing the Discount Option, you will not be eligible to receive the Total Consideration unless your duly completed electronic acceptance notice, letter of transmittal in electronic form and any other required documents are received by this date and time, but you will be eligible to receive the Consideration (as defined herein).
 
At or around 11:00 A.M. (New York City
time), May 13, 2010
 
FX Determination Date (unless extended)
The international joint dealer managers determine, and shortly thereafter Argentina announces, the FX Rate 2010 for each relevant currency.
 
At or around 3:00 P.M. (New York City
time), May 14, 2010
 
Calculation of 2017 Globals Issue Price and 2005 Discounts Trading Price (unless extended)
Argentina calculates the 2017 Globals Issue Price and the exchange agent calculates the 2005 Discounts Trading Price.
 
At or around 6:00 P.M. (New York City time), May 17, 2010, or as soon as practicable thereafter
 
 
Early Announcement (unless postponed or early tender period is extended or earlier terminated)
Unless it has terminated the Invitation earlier, Argentina will determine in its sole discretion whether to accept tenders submitted by the Early Tender Deadline and announce the preliminary results of the Invitation, including the aggregate principal amount of each series of New Securities to be issued on the Early Settlement Date (as defined herein).  We refer to this date as the “Early Announcement Date.”  The Early Announcement Date may be postponed by Argentina for any reason, including if the early tender period is extended.
 
Argentina will also announce the 2017 Globals Maturity Date, the interest payment dates for the 2017 Globals, the 2017 Globals Issue Price, the principal amount of 2017 Globals that it expects to sell in the concurrent cash offering described herein, and the definitive calculation (subject to rounding) (per U.S.$1,000, €1,000, ₤1,000, Sfr.1,000, ¥100,000 and Ps. 1,000 of Eligible Amount of Eligible Securities) of the Total Consideration and Consideration deliverable upon the exchange of Pre-2005 Eligible Securities or 2005 Eligible Securities under the Discount Option, after deduction of the international joint dealer managers’ fee applicable to the exchange of Pre-2005 Eligible Securities pursuant to the Discount Option.
 
Argentina expects that trading in New Securities on a when-and-if issued basis will commence following the Early Announcement Date.  However, there can be no assurances that this will occur.
 
 
 
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On or about June 2, 2010, or as soon as practicable thereafter
Early Settlement of the Discount Option (unless postponed or early tender period is extended or earlier terminated)
If you elect the Discount Option with respect to any Eligible Securities that you (as a Large Holder or a Small Holder) tender prior to the Early Tender Deadline, those Eligible Securities will first be cancelled and then you will receive in exchange any New Securities to which you are entitled.  If necessary, the Early Settlement may occur over a period of up to seven business days.  We refer to this date, or these dates, if multiple business days are necessary, as the “Early Settlement Date.”  The length of the Early Settlement Date will have no effect on the New Securities that you may receive in the Invitation.
 
If you elect the Par Option with respect to any of your Eligible Securities, your settlement with respect to those Eligible Securities will occur on the Final Settlement of the Invitation, whether or not you are allocated Pars or your tender is subject to proration and even if you tendered your Eligible Securities before the Early Tender Deadline.
 
5:00 P.M. (New York City time),
June 7, 2010
 
Expiration (unless Submission Period is extended or earlier terminated)
 
 
The Submission Period ends and the Invitation expires, unless Argentina extends it or terminates the Invitation earlier as provided herein.  After this date, you may no longer submit tenders.  We refer to this date as the “Expiration Date.”
 
At or around 3:00 P.M. (New York City time), on June 8, 2010, or as soon as practicable thereafter
 
 
Calculation of the 2005 Pars Trading Price (unless extended)
The exchange agent calculates the 2005 Pars Trading Price.
 
At or around 6:00 P.M. (New York City time), on June 15, 2010, or as soon as practicable thereafter
 
 
Final Announcement (unless postponed or Submission Period is extended or earlier terminated)
 
Unless it has terminated the Invitation earlier, Argentina will announce the final results of the Invitation, including the aggregate principal amount of each series of New Securities to be issued, and the amount of the cash payment to be made to holders of Pre-2005 Eligible Securities who elect and are allocated the Par Option on the Final Settlement Date (as defined below) and details as to any proration applicable to holders electing the Par Option.  We refer to this date as the “Final Announcement Date.”  The Final Announcement Date may be postponed by Argentina for any reason, including if the Submission Period is extended.
 
Argentina will also announce the 2005 Pars Trading Price and the definitive calculation (subject to rounding) (per U.S.$1,000, €1,000, ₤1,000, Sfr.1,000, ¥100,000 and Ps. 1,000 of Eligible Amount of Eligible Securities) of the Total Consideration deliverable upon the exchange of Pre-2005 Eligible Securities or 2005 Eligible Securities under the Par Option, after deduction of the international joint dealer managers’ fee applicable to the exchange of Pre-2005 Eligible Securities pursuant to the Par Option.
 
 
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On or about August 2, 2010, or as soon as practicable thereafter
 
Final Settlement (unless postponed or Submission Period is extended or earlier terminated)
 
Eligible Securities (i) as to which you elect the Discount Option and you tender prior to the Expiration Date but after the Early Tender Deadline or (ii) as to which you elect the Par Option (whether or not you are allocated Pars or your tender is subject to proration) and you tender prior to the Expiration Date will first be cancelled and then you will receive in exchange any New Securities and cash payments, if any, to which you are entitled.  If necessary, the settlement may occur over a period of up to ten business days.  We refer to this date, or these dates, if multiple business days are necessary, as the “Final Settlement Date.”  The length of the Final Settlement Date will have no effect on the New Securities that you may receive in the Invitation.
 
Announcements with respect to the Invitation (including announcements with respect to the termination, extension, withdrawal or amendment of the Invitation) will be made on the Invitation Website, on the website of the Luxembourg Stock Exchange (http://www.bourse.lu), by press release issued to Bloomberg News and Thomson Reuters News Service, which we refer to as the “news services,” followed in certain cases by publication in a newspaper with general circulation in Luxembourg (which is expected to be the Luxemburger Wort or the Tageblatt) and through publication in the form and manner required in certain jurisdictions outside the United States.
 
 
 
 


     

 
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Terms of the Invitation
 
General
Argentina is inviting holders of Eligible Securities to submit offers to tender their Eligible Securities in exchange for newly issued New Securities and, in certain cases, a cash payment, on the terms and subject to the conditions set forth in this document and the related electronic acceptance notices.  To satisfy Argentina’s obligations under the “Rights Upon Future Offers” provisions in the Eligible Securities issued by Argentina in its 2005 exchange offer, we are offering holders of our 2005 Eligible Securities the right to participate in the Invitation, subject to the overall terms and objectives of the Invitation as set out herein.
Purpose of the Invitation
To restructure and cancel defaulted debt obligations of Argentina represented by Pre-2005 Eligible Securities, to release Argentina from any related claims, including any administrative, litigation or arbitral claims and to terminate legal proceedings against Argentina in respect of the tendered Eligible Securities in consideration for the issuance of New Securities and, in certain cases, a cash payment.  If your tendered Eligible Securities are the subject of a pending administrative, litigation, arbitral or other legal proceeding against Argentina or you have obtained, or obtain in the future, a payment order, judgment, arbitral award or other such order against Argentina in respect of your tendered Eligible Securities, then as a condition to your participation in the Invitation, you will be required to agree to terminate any legal proceeding against Argentina in respect of your tendered Eligible Securities, release Argentina from all claims, including any administrative, litigation or arbitral claims, and take extra steps and procedures in order to participate in the Invitation, as discussed under “Terms of the Invitation—Tender Procedures—Special Procedures for Eligible Securities Subject to Outstanding Judgments or Pending Legal or Arbitral Proceedings.”  The exchange will constitute full performance and satisfaction by Argentina of any payment order, judgment, arbitral award or other such order you have obtained, or may obtain in the future, against Argentina in respect of your tendered Eligible Securities.
Acceptance
Argentina reserves the right not to accept tenders in its sole discretion, if and to the extent permitted by applicable laws, rules and regulations in each jurisdiction where Argentina is making the Invitation.  Argentina’s acceptance of tenders will be subject to the satisfaction or waiver of the financing, cancellation and other conditions described below under “—Financing Condition,” “—Cancellation Condition,” and “—Other Conditions to the Invitation” respectively.
 
If Argentina accepts your tender, your Eligible Securities will first be cancelled and then you will receive in exchange, by credit to the same account at a principal clearing system from which your Eligible Securities are tendered, the New Securities and, if applicable, the cash payment, to which you are entitled.  If your Eligible Securities are tendered through a principal clearing system that is not the primary clearing system for the New Securities that you are entitled to receive, your New Securities will be credited first to the account of your principal clearing system at such primary clearing system and then the principal clearing system will transfer the New Securities to your account.  The primary clearing systems for all New Securities governed by New York or English law are Clearstream, Luxembourg and Euroclear and the primary clearing system for all New Securities governed by Argentine law is Central de Registro y Liquidación de Pasivos Públicos y Fideicomisos Financieros, which we refer as “CRYL.” If Argentina elects to accept any tenders, it will announce the preliminary and final results of the Invitation, including the aggregate amount of each series of New Securities to be issued, at or around 5:00 P.M. (New York City time), on the Early Announcement Date and on the Final Announcement Date, respectively.
 
 
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Termination; Amendments
At any time before Argentina announces the acceptance of any tenders on the Early Announcement Date or the Final Announcement Date, as applicable, Argentina may, in its sole discretion and to the extent permitted by the applicable laws, rules and regulations in each jurisdiction where Argentina is making the Invitation:  
   ●
terminate the Invitation (including with respect to tenders submitted prior to the time of the termination);      
   ●
extend the Invitation past the originally scheduled Early Tender Deadline or Expiration Date, as applicable;  
   ●
withdraw the Invitation from any one or more jurisdictions; or
   ●
amend the Invitation, including amendments in any one or more jurisdictions.
 
Announcements in connection with the Invitation (including announcements with respect to the termination, extension, withdrawal or amendment of the Invitation) will be displayed on the Invitation Website, on the website of the Luxembourg Stock Exchange (http://www.bourse.lu) and, to the extent provided in this document, issued by press release to the news services.
 
In addition, Argentina reserves the right to extend or delay the Early Settlement Date or the Final Settlement Date, to terminate the Invitation after the Early Announcement Date or the Final Announcement Date or to modify the settlement procedures in any way if:
  -
any court order or judgment is issued, or any legal proceedings are commenced with the purpose of preventing the cancellation of the Eligible Securities tendered, attaching payments to Argentina in connection with Argentina’s concurrent cash offering, attaching or enjoining the New Securities, impeding or attaching the cash payments pursuant to the Invitation or payments under the New Securities, preventing the release of claims, including any administrative, litigation or arbitral claims, preventing the termination of pending administrative, litigation, arbitral or other legal proceedings against Argentina in respect of the tendered Eligible Securities, preventing the satisfaction of any payment order, judgment, arbitral award or other such order against Argentina in respect of the tendered Eligible Securities, or otherwise having the effect of frustrating the purposes of the Invitation; or
  -
Argentina, in its sole discretion and to the extent permitted by applicable laws, rules and regulations, determines that such extension, delay, termination or modification is in the best interests of Argentina or the holders of Eligible Securities seeking to participate in the Invitation, in light of any court order, judgment or pending administrative, litigation, arbitral or other legal proceedings against Argentina.
Options
Subject to the terms and conditions of the Invitation described in this document, you may elect either the “Discount Option” or the “Par Option” in exchange for any Eligible Securities that you tender that are accepted by Argentina.  In the circumstances discussed under “—Limitation on Issuance of Pars” and “—Allocation of the Par Option,” you may be allocated the Discount Option even if you have elected to receive the Par Option.  We summarize certain key differences between the Discount Option and the Par Option below.
 
 
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  Holders of Pre-2005 Eligible Securities that elect the Discount Option will receive a principal amount of Discounts equal to 33.7% of the Eligible Amount of the Eligible Securities they tender, whereas holders electing (and to the extent they are allocated) the Par Option will receive Pars in a principal amount equal to 100% of the Eligible Amount of their tendered Eligible Securities, adjusted, if the tendered Eligible Securities are denominated in a currency different from the Discounts or Pars received, by the applicable FX Rate 2003.  The Discounts mature in 2033, five years earlier than the final maturity of the Pars (2038).  The Discounts accrue interest at a higher rate than the Pars, although a portion of this interest is capitalized until December 31, 2013.  Holders of Pre-2005 Eligible Securities electing the Discount Option will receive, in payment of the interest that would have accrued and been payable in cash on the Discounts with respect to the period from December 31, 2003 to but excluding December 31, 2009 if the Discounts had been issued as of December 31, 2003, U.S. dollar-denominated 2017 Globals as part of their Total Consideration or Consideration, whereas holders of Pre-2005 Eligible Securities who elect and are allocated the Par Option will receive on the Final Settlement Date a cash payment in the currency in which the Pars they receive are denominated, in payment of the interest that would have accrued on the Pars with respect to the period from December 31, 2003 to but excluding September 30, 2009 if the Pars had been issued as of December 31, 2003.  The principal amount of 2017 Globals to be issued in the Discount Option will be greater than the cash payment in the Par Option with respect to the same Eligible Amount of Eligible Securities because of the interest rate differential between the Discounts and the Pars during the interest accrual periods referred to above, but the 2017 Globals will mature only after seven years, whereas the cash payment in the Par Option will be made on the Final Settlement Date.  Holders of Pre-2005 Eligible Securities will receive the same notional amount of GDP-linked Securities, regardless of whether they elect or are allocated the Discount Option or the Par Option.
 
You may elect the Par Option for up to U.S.$50,000, €40,000, ₤30,000, Sfr.60,000, ¥5,000,000 or Ps. 150,000, as the case may be, in outstanding principal amount of each series of Pre-2005 Eligible Securities, or in Eligible Amount of each series of 2005 Eligible Securities, that you hold but not more.  We call this limit the “Par Option Limit per Holder.”  If your tender exceeds the Par Option Limit per Holder, your election of the Par Option will be invalid with respect to such excess, and you will be deemed to have elected the Discount Option with respect to such excess.  If a direct participant tenders Eligible Securities on behalf of more than one beneficial owner in the same electronic acceptance notice, and each such beneficial owner is separately identified in one or more letters of transmittal in electronic form submitted to the information agent by the underlying financial intermediaries, the Par Option Limit per Holder will be applied separately for each beneficial owner tendering Eligible Securities.  Argentina and the information agent have agreed that they will maintain the confidentiality of the information contained in the letter(s) of transmittal relating to the identity of the beneficial owners and any administrative, litigation, arbitral or other legal proceedings against Argentina relating to the Eligible Securities tendered, and to store, process and use the data contained in such letter(s) of transmittal only to the extent required for the settlement of the Invitation, for litigation reconciliation purposes or for the exercise by Argentina of any rights under the representations, warranties and covenants given in connection with the Invitation.
 
 
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Limitation on Issuance of Pars
Argentina may issue Pars only up to a maximum aggregate principal amount of U.S.$2 billion or the equivalent in other currencies, using the applicable FX Rate 2010 (the “Par Option Maximum”).  If the U.S. dollar equivalent of the principal amount of Pars that would be issued in respect of all Eligible Securities for which the Par Option is elected (after application of the Par Option Limit per Holder) does not exceed the Par Option Maximum, then Argentina will issue an amount of Pars equal to the total amount of Pars so elected by tendering holders pursuant to the Invitation.  If the U.S. dollar equivalent of the principal amount of Pars that would be issued in respect of all Eligible Securities for which the Par Option is elected (after application of the Par Option Limit per Holder) exceeds the Par Option Maximum, then Argentina will allocate the Par Option among tendering holders as set forth under “—Allocation of the Par Option” below.
Allocation of the Par Option
If the U.S. dollar equivalent of the principal amount of Pars that would be issued in respect of all Eligible Securities for which the Par Option is elected (after application of the Par Option Limit per Holder) exceeds the Par Option Maximum, then Argentina will allocate this maximum amount among tendering holders that have validly elected the Par Option on a pro rata basis.  To the extent that a tender of Eligible Securities electing the Par Option is prorated, it will be reallocated to the Discount Option.
 
The allocation of the Par Option among tendering holders will encompass all tenders electing Par Option submitted pursuant to the Invitation and, if concurrent with the Invitation, the offer in Japan, in each case after application of the Par Option Limit per Holder.  All determinations made by Argentina in the allocation of the Par Option as provided above will be final and binding.
No Limitation on Issuance of Discounts
There is no limit on the issuance or allocation of Discounts pursuant to the Invitation.  If you elect to receive any Pars and the amount you would receive (in the absence of any limitation on the issuance of Pars) would exceed the maximum amount of Pars that you are permitted to receive in the Invitation (as provided above), the Eligible Securities that cannot be exchanged for Pars as a result of that limitation will instead be exchanged for Discounts and related securities as if you had elected the Discount Option for those Eligible Securities.
Discount Option—Tenders of Pre-2005 Eligible Securities
Subject to the terms and conditions of the Invitation, if you elect or are allocated the Discount Option with respect to any of your Pre-2005 Eligible Securities, you will receive a combination of the following New Securities in exchange for any Pre-2005 Eligible Securities you tender and Argentina accepts:
   ●
 Discount Bonds due December 2033 (“Discounts”);
   ●
 Global Bonds due 2017 (“2017 Globals”); and
   ●
 GDP-linked Securities expiring no later than in December 2035 (“GDP-linked Securities”).
 
See the chart included on page S-26 for a summary of the New Securities you will receive if you tender Pre-2005 Eligible Securities pursuant to the Invitation and Argentina accepts your tender.
 
 
S - 8

 
  The Discounts issued pursuant to the Invitation will not be fungible with the corresponding 2005 Discounts issued by Argentina pursuant to its 2005 exchange offer.  However, each series of GDP-linked Securities, other than the GDP-linked Securities denominated in U.S. dollars and governed by New York law, issued pursuant to the Invitation will constitute a further issuance of, will be assigned the same ISINs and common codes as, and will trade fungibly with, the 2005 GDP-linked Securities.
 
For purposes of the Invitation, your Eligible Securities will be assigned an “Eligible Amount,” which in the case of the Pre-2005 Eligible Securities will be equal to (i) their outstanding principal amount as of December 31, 2001, plus (ii) any accrued but unpaid interest on your Eligible Securities up to but excluding December 31, 2001.  You may determine the Eligible Amount of the Eligible Securities that you hold of each series by multiplying the original principal amount of such Eligible Securities by the relevant percentage under the heading “Eligible Amount as a percentage of original principal amount,” as set forth in the table in Annex C-1.
Total Consideration for Tenders of Pre-2005 Eligible Securities in Exchange for Discounts
Subject to the terms and conditions of the Invitation, if you are (i) a Large Holder that elects the Discount Option and tenders your Pre-2005 Eligible Securities on or before the Early Tender Deadline, (ii) a Large Holder that tenders your Pre-2005 Eligible Securities on or before the Expiration Date and elects the Par Option but is allocated Discounts, or (iii) a Small Holder that tenders your Pre-2005 Eligible Securities on or before the Expiration Date, you will receive the following combination of Discounts, 2017 Globals and GDP-linked Securities:
  1.
An original principal amount of Discounts equal to the product of the Eligible Amount of the Pre-2005 Eligible Securities you tender, multiplied by the exchange ratio set forth on page S-26 applicable to the Discount Option and the currency and governing law of your tendered Pre-2005 Eligible Securities.  The aggregate original principal amount of Discounts you receive will be rounded downward to the nearest one currency unit (e.g., U.S.$1.00).  The principal amount of Discounts you will receive upon settlement of the Invitation will also be adjusted for capitalized interest and, if you receive Discounts denominated in pesos, for inflation, each as described under “—Adjustments to the Principal Amount of Discounts.”  See the table on page S-26 for the currency and governing law of the Discounts, which varies depending on the currency and governing law of your Pre-2005 Eligible Securities.
  2. A principal amount of 2017 Globals equal to U.S.$0.2907576, €0.2726930 or Ps. 0.2657117 for each U.S.$1.00, €1.00 or Ps. 1.00, respectively, original principal amount of Discounts that you receive in exchange for your tendered Pre-2005 Eligible Securities in the Invitation, rounded downward, if necessary, to 2 decimal places, adjusted, if your Discounts are denominated in a currency other than U.S. dollars, by the applicable FX Rate 2010, and rounded downward, if necessary, to the nearest U.S.$1.00.  This amount equals the total amount of interest that would have been paid to you in cash on the Discounts with respect to the period from December 31, 2003 to but excluding December 31, 2009 (including interest paid on December 31, 2009) if your Discounts had been issued as of and accrued interest from and including December 31, 2003 to but excluding December 31, 2009, at the rates per annum applicable to the 2005 Discounts during such period, which are set out below:
 
 
S - 9

 
 
   From and
 including
 To but
 excluding
  Currency  
   U.S. dollars  Euro  Pesos  
 
December 31, 2003
December 31, 2008
3.97%
3.75%
2.79%
 
  December 31, 2008
December 31, 2009
5.77% 5.45% 4.06%  
   
This interest calculation includes (i) interest that would have been payable in cash on both the original principal amount of your Discounts and on the adjustments that would have been made to the principal amount of your Discounts in respect of capitalized interest and (ii) if you receive peso-denominated Discounts, interest paid in cash on the adjustments made to the principal amount of your Discounts in respect of Argentine inflation, based on the CER.  The principal amount of 2017 Globals that you receive will not be adjusted to reflect the 2017 Globals Issue Price.
   
Annex D sets forth the amount (expressed as a percentage of the original principal amount of Discounts to be received) of (a) the interest payments made in cash on the 2005 Discounts referred to in 2 above and (b) the capitalized interest on the 2005 Discounts referred to in 1 above with respect to the period from December 31, 2003 to but excluding December 31, 2009.
   
The exchange agent will be required to transfer on your behalf, on the Early Settlement Date or the Final Settlement Date, as applicable, a portion of the 2017 Globals that you are entitled to receive to or for the account of the international joint dealer managers in payment of their fee, calculated in accordance with “Plan of Distribution—Dealer Manager Agreement.”
   
The total amount of 2017 Globals that you will actually receive will therefore be the amount referred to in 2 above (rounded downward to the nearest U.S.$1.00), minus the fee referred to in the immediately preceding paragraph.
   3.
A notional amount of GDP-linked Securities equal to the Eligible Amount of the Pre-2005 Eligible Securities that you tender and Argentina accepts in the Invitation or, if your Pre-2005 Eligible Securities are denominated in a currency other than the currency of the Discounts that you receive, the equivalent of your Eligible Amount in the currency in which your Discounts are denominated, translated into such currency using the applicable FX Rate 2003.  The aggregate notional amount of GDP-linked Securities that you receive will be rounded downward to the nearest one currency unit (e.g., U.S.$1.00).
 
Hypothetical examples of the calculation of the Total Consideration, including the principal amount of Discounts, principal amount of 2017 Globals and notional amount of GDP-linked Securities that you may receive (after deduction of the international joint dealer managers’ fee), are set forth in Annex F-1.
 
You will not receive any payment or any other consideration in respect of any accrued but unpaid interest on your tendered Pre-2005 Eligible Securities for any period subsequent to December 31, 2001.
 
 
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Consideration for Tenders After the Early Tender Deadline by Large Holders of Pre-2005 Eligible Securities in Exchange for Discounts
Subject to the terms and conditions of the Invitation, if you elect the Discount Option, are a Large Holder and you tender Pre-2005 Eligible Securities after the Early Tender Deadline, you will receive the Total Consideration for those Pre-2005 Eligible Securities minus a principal amount of 2017 Globals equal to U.S.$0.01 per U.S.$1.00 in Eligible Amount of Pre-2005 Eligible Securities that you tender and Argentina accepts or, if your Eligible Securities are denominated in a currency other than U.S. dollars, the equivalent of your Eligible Amount in U.S. dollars, translated into such currency using the applicable FX Rate 2003 and rounded downward, if necessary, to the nearest U.S.$1.00.
 
The exchange agent will be required to transfer on your behalf, on the Final Settlement Date, a portion of the 2017 Globals that you are entitled to receive to or for the account of the international joint dealer managers in payment of their fee, calculated in accordance with “—International Joint Dealer Managers’ Fee Payable by Tendering Holders of Pre-2005 Eligible Securities.”
 
The Discounts, 2017 Globals and GDP-linked Securities issued on the Final Settlement Date will constitute a further issuance of, will be assigned the same ISINs and common codes as, and will trade fungibly with, the corresponding series of New Securities issued on the Early Settlement Date.  However, it is possible that the Discounts governed by New York law, the Discounts governed by English law and/or the 2017 Globals issued on the Final Settlement Date will have a greater amount of original issue discount (“OID”) for U.S. federal income tax purposes than the corresponding series of New Securities issued on the Early Settlement Date.  If this is the case, Argentina intends to calculate and report OID, if any, with respect to any such series of New Securities based on the issue price of the New Securities issued on the Final Settlement Date.  See “Taxation—U.S. Federal Income Tax Consequences—Consequences of Holding the New Securities—Qualified Stated Interest and Original Issue Discount on the New Bonds” for further information.
Par Option—Tenders of Pre-2005 Eligible Securities 
Subject to the terms and conditions of the Invitation, if you elect, and to the extent that you are allocated, the Par Option with respect to any of your Pre-2005 Eligible Securities, you will receive a combination of the following New Securities and a cash payment in exchange for the Pre-2005 Eligible Securities you tender and Argentina accepts:
 
 ●
Pars due December 2038 (“Pars”);
   ●
Cash payment; and
   ●
GDP-linked Securities.
 
See the chart included on page S-26 for a summary of the New Securities you will receive if you tender Pre-2005 Eligible Securities pursuant to the Invitation and Argentina accepts your tender.
  The Pars issued pursuant to the Invitation will not be fungible with the corresponding 2005 Pars issued by Argentina pursuant to its 2005 exchange offer.  However, each series of GDP-linked Securities, other than the GDP-linked Securities denominated in U.S. dollars and governed by New York law, issued pursuant to the Invitation will constitute a further issuance of, will be assigned the same ISINs and common codes as, and will trade fungibly with, the 2005 GDP-linked Securities.
 
 
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Total Consideration for Tenders of Pre-2005 Eligible Securities in Exchange for Pars
Subject to the terms and conditions of the Invitation, if you elect, and to the extent that you are allocated, the Par Option with respect to any of your Pre-2005 Eligible Securities, you will receive the following combination of Pars, cash payment and GDP-linked Securities:
   1.
An original principal amount of Pars equal to the Eligible Amount of those Pre-2005 Eligible Securities multiplied by the exchange ratio set forth on page S-26 applicable to the Par Option and the currency and governing law of your tendered Pre-2005 Eligible Securities.  The aggregate original principal amount of Pars you receive will be rounded downward to the nearest one currency unit (e.g., U.S.$1.00).  If you receive Pars denominated in pesos, the principal amount of Pars you will receive upon settlement of the Invitation will also be adjusted for inflation, as described under “—Adjustments to the Principal Amount of Pars Denominated in Pesos.”  See the table on page S-26 for the currency and governing law of the Pars, which varies depending on the currency and governing law of your Pre-2005 Eligible Securities.
   2.
A cash payment of U.S.$0.0823250, €0.0743000 or Ps. 0.0517113 for each U.S.$1.00, €1.00 or Ps. 1.00, respectively, original principal amount of Pars that you receive in exchange for your tendered Pre-2005 Eligible Securities in the Invitation, rounded downward, if necessary, to the nearest U.S.$0.01, €0.01 or Ps. 0.01, as applicable.  This amount equals the total amount of interest that would have been paid to you in cash on the Pars with respect to the period from December 31, 2003 to but excluding September 30, 2009 (including interest paid on September 30, 2009) if your Pars had been issued as of and accrued interest from and including December 31, 2003 to but excluding September 30, 2009, at the rates per annum applicable to the 2005 Pars during such period, which are set out below:
 
From and
including 
To but
excluding 
   Currency  
 
U.S. dollars
Euro
Pesos
 
 
December 31, 2003
March 31, 2009
1.33%
1.20%  0.63%  
 
March 31, 2009
September 30, 2009
 2.50% 2.26%  1.18%  
   
If you receive peso-denominated Pars, the amount of your cash payment includes the cash interest that Argentina would have paid on your Pars in respect of the increases to the principal amount of your Pars in respect of Argentine inflation, based on the CER, during the period from and including December 31, 2003 to but excluding September 30, 2009.
    Annex D sets forth the amount (expressed as a percentage of the original principal amount of Pars to be received) of the interest payments made in cash on the 2005 Pars referred to in 2 above.
   
The exchange agent will be required to transfer on your behalf, on the Final Settlement Date, a portion of the cash payment that you are entitled to receive to or for the account of the international joint dealer managers in payment of their fee, calculated in accordance with “Plan of Distribution—Dealer Manager Agreement.”
 
 
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The total amount of cash that you will actually receive therefore will be the amount first referred to in 2 above (rounded downward to the nearest U.S.$0.01, €0.01 or Ps. 0.01, as applicable) minus the fee referred to in the immediately preceding paragraph. The table below summarizes the cash payment to a holder of U.S.$10,000, €10,000 or Ps. 10,000 Eligible Amount of Pre-2005 Eligible Securities that tenders such Eligible Securities and elects the Par Option, assuming that the Par Option is not prorated.
 
Cash Payment After Deduction of International
Joint Dealer Managers’ Fee
 
 
Currency of
Par Bonds
Cash Payment
in Respect of Past
Interest on Pars
Fee
Cash to be
Received by
Tendering Holder
 
(per U.S.$10,000, €10,000 or Ps. 10,000 Eligible Amount
tendered or Original Principal Amount of Pars Received)
         
 
U.S. dollars
U.S.$823.25         
U.S.$40.00         
U.S.$783.25         
 
Euro
€743.00         
€40.00         
€703.00         
 
Pesos
Ps. 517.11         
Ps. 40.00         
Ps. 477.11         
   3.
A notional amount of GDP-linked Securities equal to the Eligible Amount of the Pre-2005 Eligible Securities that you tender and Argentina accepts in the Invitation or, if your Pre-2005 Eligible Securities are denominated in a currency other than the currency of the Pars that you receive, the equivalent of your Eligible Amount in the currency in which your Pars are denominated, translated into such currency using the applicable FX Rate 2003.  The aggregate notional amount of GDP-linked Securities that you receive will be rounded downward to the nearest one currency unit (e.g., U.S.$1.00).
 
Hypothetical examples of the calculation of the Total Consideration, including the principal amount of Pars, the cash payment and notional amount of GDP-linked Securities that you may receive (after deduction of the international joint dealer managers’ fee), are set forth in Annex F-1.
 
You will not receive any payment or any other consideration in respect of any accrued but unpaid interest on your tendered Pre-2005 Eligible Securities for any period subsequent to December 31, 2001.
Discount Option and Par Option for Holders of 2005 Eligible Securities
The Total Consideration and Consideration that holders tendering 2005 Eligible Securities will receive are described under “Terms of the Invitation Applicable Only to Holders of 2005 Eligible Securities” below.
Adjustments to the Principal Amount of Discounts
Any Discounts you receive in exchange for your Eligible Securities will begin to accrue interest from and including December 31, 2009.
 
 
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  The principal amount of Discounts you will receive upon settlement of the Invitation will equal the original principal amount to which you are entitled (as provided herein) plus an additional principal amount equal to the portion of interest that would have been capitalized during the period from and including December 31, 2003 to but excluding December 31, 2009 (including interest capitalized on December 31, 2009) had you been issued 2005 Discounts in Argentina’s 2005 exchange offer in the same original principal amount.  This adjustment will be made regardless of the type of Eligible Securities you tender, including if you tender 2005 Discounts, 2005 Pars or 2005 Quasi-Pars.  Argentina is making this adjustment on the 2005 Eligible Securities because the “Eligible Amount” of your Eligible Securities is their “original principal amount,” which is defined to exclude any interest capitalized on the 2005 Eligible Securities.
 
If the Discounts you receive are denominated in pesos, the principal amount of Discounts that you receive will, under the terms of the Discounts, be adjusted to reflect inflation, based on the CER, since December 31, 2003, as described under “Description of the New Securities—Special Terms of New Securities Governed by Argentine Law.”  This adjustment will be made regardless of the type of Eligible Securities you tender, including if you tender 2005 Discounts, 2005 Pars or 2005 Quasi-Pars.
 
Argentina understands that the clearing systems record and effect transactions in the Discounts based on their original principal amount.  Therefore, the adjustments to the principal amount of your Discounts will not be reflected in the amount shown on the statements you receive from the clearing system in which you hold your Discounts (if you are a direct participant in that clearing system) or in the statements that you receive from your custodian or other financial intermediary (if you are not a direct participant), because the Discounts will be credited and will trade in the clearing systems based upon their original principal amount.  They will, however, be effective for purposes of determining the accrued interest and principal amount payable on your Discounts.
Adjustments to the Principal Amount of Pars Denominated in Pesos
If you receive Pars denominated in pesos in exchange for your Eligible Securities, the principal amount of Pars that you receive will, under the terms of the Pars, be adjusted to reflect inflation, based on the CER, since December 31, 2003, as described under “Description of the New Securities—Special Terms of New Securities Governed by Argentine Law.”  This adjustment will be made regardless of the type of Eligible Securities you tender, including if you tender 2005 Discounts, 2005 Pars or 2005 Quasi-Pars.
  This adjustment to the original principal amount of your Pars will not be reflected in the amount shown on the statements you receive from the clearing system in which you hold your Pars (if you are a direct participant in that clearing system) or in the statements that you receive from your custodian or other financial intermediary (if you are not a direct participant), because the Pars will be credited and will trade in the clearing systems based upon their original principal amount.  This adjustment will, however, be effective for purposes of determining the accrued interest and principal amount payable on your Pars.
 
 
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Currency Denomination of the New
Securities
The currency of the Eligible Securities that you tender and Argentina accepts will determine the currency in which the Discounts or Pars you will receive will be denominated, as follows:
   ●
 Eligible Securities denominated in U.S. dollars, euro (or any Eligible Securities originally denominated in a predecessor currency to the euro, which currencies for this purpose are deemed to have been originally denominated in euro) or pesos.  You will receive Discounts or Pars denominated in the same currency as your tendered Eligible Securities.
   ●
 Eligible Securities denominated in pounds sterling or Swiss francs.  You will receive Discounts or Pars denominated in euro.
   ●
 Eligible Securities denominated in yen.  You will receive Discounts or Pars denominated in euro.
 
While holders of yen-denominated Eligible Securities governed by Japanese law will not be able to participate in the Invitation, they may be able to do so pursuant to the invitation in Japan, if conducted by Argentina.   Argentina, however, will only launch an offer in Japan after having received all necessary regulatory approvals from Japanese authorities.  (See “Global Offering―Invitation in Japan”).
 
If you are entitled to receive 2017 Globals pursuant to the Invitation, the 2017 Globals you receive will be denominated in U.S. dollars.
 
If you are entitled to receive GDP-linked Securities in the Invitation, the GDP-linked Securities you receive in exchange for your Eligible Securities will be denominated in the same currency as the currency of the Discounts or Pars, as applicable, you receive in exchange for the same Eligible Securities.
 
Solely for purposes of the Invitation, Argentina will treat Eligible Securities originally denominated in a currency other than pesos and governed by Argentine law as if they were denominated in the currency in which they were originally issued.
Governing Law of the New Securities
If the Eligible Securities you tender are not governed by Argentine law, the governing law of any Discounts or Pars you receive will be as follows:
   ●
Discounts or Pars denominated in U.S. dollars will be governed by New York law;
   ●
Discounts or Pars denominated in euro will be governed by English law; and
   ●
Discounts or Pars denominated in pesos will be governed by Argentine law.
 
If the Eligible Securities you tender are governed by Argentine law, you will receive Discounts or Pars governed by Argentine law.
 
If you are entitled to receive 2017 Globals in the Invitation, all 2017 Globals you receive will be governed by New York law.
 
 
S - 15

 
 
If you are entitled to receive GDP-linked Securities in the Invitation, the GDP-linked Securities you receive in exchange for your Eligible Securities will be governed by the law that governs the Discounts or Pars you receive in exchange for the same Eligible Securities.
No Maximum or Minimum Size of
Invitation
Argentina has not set any limit on the principal amount of Discounts, the notional amount of GDP-linked Securities or the principal amount of 2017 Globals that may be issued pursuant to the Invitation; however, the U.S. dollar equivalent of the aggregate principal amount of Pars issued by Argentina in the Invitation may not exceed the Par Option Maximum.  Argentina has not set an express limit on the aggregate amount of cash payments that it will make pursuant to the Invitation, but this amount will be indirectly limited by the Par Option Maximum.  If the Par Option Maximum is reached, Argentina expects that the aggregate amount of its cash payments will be approximately the equivalent of U.S.$168 million.  In addition, Argentina has not conditioned the Invitation on any minimum level of participation by holders of Eligible Securities.
Financing Condition
The acceptance by Argentina of tendered Eligible Securities and the settlement of the Invitation on the Early Settlement Date are subject to the condition that Argentina has received the proceeds of a concurrent offering of global bonds due 2017 for cash for an aggregate principal amount of not less than U.S.$1,000,000,000 on or before the Early Settlement Date.  Argentina reserves the right to waive this condition (or to issue a smaller amount of such global bonds) in the event that Argentina determines that market conditions do not permit the issuance of U.S.$1,000,000,000 of global bonds due 2017 on terms considered by Argentina, in its sole and absolute discretion, to be satisfactory.  For the avoidance of doubt, Argentina may not waive the Financing Condition if the concurrent cash offering is not priced, or Argentina does not receive the proceeds of the concurrent cash offering, in each case as a result of any court or arbitral order or legal proceeding seeking to attach such proceeds or to enjoin Argentina from receiving such proceeds or the subscribers from delivering such proceeds to Argentina or otherwise to frustrate the purpose of the concurrent cash offering, or having that effect.  The offering of global bonds due 2017 for cash, which we refer to as the “concurrent cash offering,” is being made pursuant to a separate offering document, not by this document.  If Argentina issues global bonds due 2017 in the concurrent cash offering, these global bonds due 2017 will constitute a single series with, have the same terms and conditions as, be assigned the same ISIN and common code as, and trade fungibly with, the 2017 Globals issued pursuant to the Invitation.
Cancellation Condition
The Invitation is conditioned on the cancellation of the Eligible Securities.  The Eligible Securities tendered by holders during the Invitation and accepted by Argentina will be cancelled on the Early Settlement Date or the Final Settlement Date, as applicable, prior to the issuance of the New Securities and the credit of the cash payments to the applicable holders’ accounts (which may take place over the course of several days).  If any court or arbitral order or administrative or legal proceeding prohibits or delays the cancellation of the tendered Eligible Securities, Argentina will postpone either or both of the Early Settlement Date or the Final Settlement Date, as applicable, until the Eligible Securities can be cancelled or, if in its judgment, cancellation cannot be effected without unreasonable delay, it will cancel the Invitation (or, if Argentina considers that the Eligible Securities affected thereby are, in its sole judgment, immaterial, Argentina may cancel the Invitation as to the affected Eligible Securities only) and return the Eligible Securities to the tendering holders.  Argentina may not waive this condition.
 
 
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Other Conditions to the Invitation
The settlement of the Invitation is also conditioned on, among other things, the absence of legal actions or proceedings affecting the legality, timing or restrictions applicable to the consummation of the Invitation.  For more information regarding the conditions to which the Invitation is subject, see “Terms of the Invitation—Other Conditions to the Invitation.”
Brady Bonds
Brady Bonds are not Eligible Securities for purposes of the Invitation.
Irrevocability; Limited Withdrawal Rights
All tenders will be irrevocable and may not be withdrawn, unless Argentina:
   ●
 extends the Submission Period of the Invitation by more than 30 calendar days;
   ●
 is required to grant withdrawal rights by U.S. securities or other applicable laws; or
   ●
 otherwise determines, in its sole and absolute discretion, to grant withdrawal rights.
 
In any of these cases, you will have the right to withdraw your tender for a period of 10 calendar days from the date Argentina first publicly announces that it is granting withdrawal rights on the website of the Luxembourg Stock Exchange (www.bourse.lu) and by press release to the news services.  See “Risk Factors¾Risk Factors Relating to the Invitation¾Risks of Participating in the Invitation.”
Minimum Tender Amount
You must tender your Eligible Securities in the minimum denomination and the integral multiples in excess of such minimum denomination that are set forth in the terms of such Eligible Securities and in Annexes A-1 and A-2 to this document.  Except as described under “¾Options” there is no maximum tender amount.
Tender Procedures
To participate in the Invitation, you must submit, or arrange to have submitted on your behalf, by 5:00 P.M. (New York City time) on the Early Tender Deadline or the Expiration Date, as applicable: (1) to a principal clearing system, a duly completed electronic acceptance notice, and (2) to the information agent, a duly completed letter of transmittal in electronic form.  If you elect the Discount Option for a portion of your Eligible Securities and the Par Option for other Eligible Securities that you own, you must submit a separate electronic acceptance notice and letter of transmittal in electronic form with respect to each option.  You must also submit a separate electronic acceptance notice and letter of transmittal in electronic form (and, if you are in Italy or Germany, a separate paper letter of transmittal to the financial institution or other intermediary through which you hold your Eligible Securities) for each series of Eligible Securities you tender.  If you fail to submit your letter of transmittal in electronic form by the applicable deadline, or your letter of transmittal in electronic form is not complete, Argentina reserves the absolute right to reject your tender or require that you remedy the same.  Holders who wish to tender certain strippable securities must follow special procedures, described under “Terms of the Invitation—Tender Procedures—Procedures for Holders of Certain Strippable Securities.”
 
 
S - 17

 
 
Your electronic acceptance notices may aggregate information with respect to multiple tenders by multiple holders, so long as each notice relates only to a single series of Eligible Securities, a single option and, if the Discount Option is elected, single type of holder (i.e., Large Holder or Small Holder).  Such aggregated electronic acceptance notices may be submitted on a daily basis, or more frequently.  Each electronic acceptance notice must:
   
state the option (the Discount Option or the Par Option) elected for the Eligible Securities tendered and, if the Discount Option is elected, whether each of the tendering holders is a Large Holder or a Small Holder.  Tenders electing the Par Option are subject to the Par Option Limit per Holder applicable to the Par Option and the Par Option Maximum.  If an electronic acceptance notice fails to or incorrectly designates the option, it will be deemed to have elected the Discount Option;
   
 state, if the tendering holders are Large Holders electing the Discount Option, whether the electronic acceptance notice is submitted on or before, or after, the Early Tender Deadline; and
   ●
 state the principal amount and series of Eligible Securities being tendered.
   The principal clearing systems through which Eligible Securities may be tendered are set forth below:
 
Principal Clearing Systems
 
Caja de Valores
Clearstream Banking AG
Clearstream, Luxembourg
Euroclear
Iberclear
Monte Titoli S.p.A.
OEKB
SIS
 
Eligible Securities may not be tendered through, and the New Securities will not be made eligible for clearance, settlement or trading in the book-entry system of, DTC.  If your Eligible Securities are held through DTC or any other clearing system, you must follow special procedures, described under “Terms of the Invitation—Tender Procedures” in order to tender your Eligible Securities and to receive New Securities.
 
Eligible Securities tendered in the Invitation will be “blocked” for transfers to third parties pending settlement of the Invitation.
Delivery of Electronic Acceptance Notices
The procedures you must follow to effectively tender Eligible Securities depend upon the manner in which you hold your Eligible Securities.
Eligible Securities in Book-Entry Form
Eligible Securities held in electronic or book-entry form may be tendered directly to the principal clearing systems, if you have an account with any of the principal clearing systems, or indirectly through financial institutions that have an account with any of the principal clearing systems.  We refer to financial institutions that have an account with any of the principal clearing systems as “direct participants” in such system.  Only these direct participants may submit electronic acceptance notices to any of the principal clearing systems.  If you are not a direct participant, you (or a financial institution or other intermediary on your behalf) must arrange for the direct participant through which you hold your Eligible Securities to submit an electronic acceptance notice on your behalf to any of the principal clearing systems.
 
 
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  For your tender of Eligible Securities to be effective, a direct participant in a principal clearing system through which you tender your Eligible Securities must submit an electronic acceptance notice on your behalf to such principal clearing system prior to 5:00 P.M. (New York City time) on the Early Tender Deadline (if you are a Large Holder electing the Discount Option and wish to receive the Total Consideration) or prior to 5:00 P.M. (New York City time) on the Expiration Date (in all other cases).  The principal clearing systems will not submit to the exchange agent any electronic acceptance notices they receive after this time.
 
The principal clearing system through which you tender your Eligible Securities must deliver your duly completed electronic acceptance notice to the exchange agent no later than two business days after the Early Tender Deadline or three business days after the Expiration Date, as applicable.
 
Upon receipt of your electronic acceptance notice, the principal clearing system will submit your electronic acceptance notice to the exchange agent.
 
The receipt of your electronic acceptance notice by a principal clearing system will result in the blocking of your tendered Eligible Securities in such clearing system.  This will prevent you from being able to transfer your tendered Eligible Securities to third parties.
Through Euroclear, Clearstream, Luxembourg or Clearstream Banking AG
If you hold Eligible Securities through Euroclear, Clearstream, Luxembourg or Clearstream Banking AG, you may submit (if you are a direct participant), or arrange to have a direct participant submit on your behalf, an electronic acceptance notice in accordance with the procedures established by Euroclear, Clearstream, Luxembourg or Clearstream Banking AG, as applicable, to participate in the Invitation.  Direct participants should refer to the respective notifications that direct participants receive from Euroclear, Clearstream, Luxembourg and Clearstream Banking AG for detailed information regarding tender procedures.
Through Caja de Valores
If you hold Eligible Securities through Caja de Valores, you may submit (if you are a direct participant), or arrange to have a direct participant submit on your behalf, an electronic acceptance notice in accordance with the procedures established by Caja de Valores for the Invitation. You may contact Caja de Valores for assistance in effecting your tender in accordance with the applicable procedures.
Through Other Clearing Systems
If you hold Eligible Securities through any other clearing system, you must follow the procedures established and deadlines required by such clearing system in order for your tender to be received by a principal clearing system prior to 5:00 P.M. (New York City time) on the Early Tender Deadline (if you are a Large Holder electing the Discount Option and wish to receive the Total Consideration) or prior to 5:00 P.M. (New York City time) on the Expiration Date (in all other cases).  In particular, you must arrange to either (i) transfer the Eligible Securities to one of the principal clearing systems or (ii) have such other clearing system submit a tender on your behalf through a principal clearing system (assuming such other clearing system is capable of doing so).
 
You may contact the information agent for assistance in effecting your tender in accordance with the applicable procedures and deadlines.
 
 
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Through a Custodian or Other Securities Intermediary
If you hold Eligible Securities through a financial institution or other intermediary, you must contact that financial institution or intermediary and instruct it to tender your Eligible Securities on your behalf.  You should contact that financial institution or intermediary well in advance of the Early Tender Deadline or the Expiration Date, as applicable, since that financial institution or intermediary may have earlier deadlines by which it must receive your instructions in order to have adequate time to meet the deadlines of the clearing system through which your Eligible Securities are tendered.
Financial institutions or other intermediaries are permitted to aggregate the tenders of their customers into a single electronic acceptance notice, subject to the following conditions:
   ●
a separate electronic acceptance notice must be submitted for each option (the Discount Option or Par Option) elected and, if the Discount Option is elected, for each type of holder (Large Holder or Small Holder);
   ●
a separate electronic acceptance notice must be submitted for each series of Eligible Securities tendered; and
   ● each such financial institution or other intermediary that submits one or more electronic acceptance notices that represent more than one tender must, with respect to each such electronic acceptance notice, submit to the information agent, through the Invitation Website, a letter of transmittal in electronic form, identifying separately the details of each such tender included in such electronic acceptance notice and containing, in the case of direct participants, the blocking reference number supplied by the principal clearing system upon confirmation of receipt of the corresponding electronic acceptance notice.
 
Financial institutions or other intermediaries that choose to aggregate tenders are encouraged to submit those tenders on a daily basis.  Detailed instructions for direct participants in a principal clearing system and for custodians and other financial intermediaries are set forth in Annexes E-1 and E-2, respectively.
Eligible Securities in Physical Form
Eligible Securities held in physical form may not be tendered pursuant to the Invitation.  If you hold Eligible Securities in physical form, you may only participate in the Invitation by first exchanging your physical securities for an interest in the corresponding global security, which will be recorded in book-entry form.  This can be accomplished by (i) selecting a financial institution or other intermediary that has a direct or indirect account with the clearing system that acts as depositary for the global security corresponding to your physical certificate, (ii) surrendering the physical certificates representing your Eligible Securities to that financial institution or intermediary, and (iii) instructing that financial institution or intermediary to exchange your physical certificate for an interest in the corresponding global security, specifying the account at the relevant clearing system where your interest in the global security should be credited.
  The process for converting physical securities into securities held in book-entry form as provided above may entail some delay.  Accordingly, if you hold your Eligible Securities in physical form and wish to participate in the Invitation, you should begin this process as soon as possible.
 
 
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Once you hold your Eligible Securities in electronic form, you will be able to tender your Eligible Securities pursuant to the Invitation in accordance with the procedures set forth in this document under “Terms of the Invitation—Tender Procedures—Eligible Securities in Electronic or Book-Entry Form.”
Delivery of Letters of Transmittal
You must deliver, or arrange to have delivered on your behalf, by 5:00 P.M. (New York City time) on the Early Tender Deadline or the Expiration Date, as applicable, a letter of transmittal in electronic form to the information agent.  The procedures for the delivery of letters of transmittal vary depending on whether you hold your Eligible Securities directly at a principal clearing system or through a financial institution or other intermediary and on whether you are located in Germany, Italy or a different jurisdiction.  The Invitation Website has been set up for the submission of letters of transmittal in electronic form.
 
Each letter of transmittal must specify, among other things:
   ●
the name of each beneficial owner of the Eligible Securities to which such letter of transmittal relates, as well as the country in which each beneficial owner is located.  We have also requested that the phone number of each beneficial owner be included in the letter of transmittal, to facilitate resolution of any questions or irregularities, but inclusion of this information is optional for beneficial owners other than those in Canada;
   ●  the option (the Discount Option or the Par Option) elected for the Eligible Securities tendered and, if the Discount Option is elected, whether each of the tendering holders is a Large Holder or a Small Holder.  Tenders electing the Par Option are subject to the Par Option Limit per Holder applicable to the Par Option and the Par Option Maximum;
   ●  if the tendering holders are Large Holders electing the Discount Option, whether the letter of transmittal in electronic form is submitted on or before, or after, the Early Tender Deadline;
   ●  the principal amount and series of Eligible Securities being tendered; and
   ●  information regarding whether the tendered Eligible Securities are subject to any administrative, litigation, arbitral or other legal proceedings against Argentina (including legal proceedings that have resulted in payment orders, judgments, arbitral awards or other such orders against Argentina).
Holders located outside of Germany and Italy
If you, as a beneficial owner of Eligible Securities, are a direct participant in the principal clearing system through which you submit your electronic acceptance notice with respect to your Eligible Securities, then you must submit to the information agent, through the Invitation Website, a letter of transmittal in electronic form, identifying the details of your tender, and containing the blocking reference number supplied by the principal clearing system upon confirmation of receipt of the corresponding electronic
 
 
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acceptance notice.  If your electronic acceptance notice aggregates multiple tenders (e.g., tenders on your own behalf and on behalf of your customers), your letter of transmittal must separately identify the details of your tender and all other tenders submitted in the same electronic acceptance notice and contain the blocking reference number supplied by the principal clearing system upon confirmation of receipt of the corresponding electronic acceptance notice.
 
If you, as a beneficial owner of Eligible Securities, are not a direct participant and hold Eligible Securities through a financial institution or other intermediary, that financial institution or intermediary must submit, or arrange to have submitted, to the information agent on your behalf, through the Invitation Website, a letter of transmittal in electronic form, identifying the details of your tender or, if the electronic acceptance notice with respect to your tender aggregates multiple tenders, separately identifying the details of your tender and all other tenders submitted in the same electronic acceptance notice.  Your intermediary may also be required to supply the reference code received from the information agent upon the submission of such letter of transmittal to the intermediary or direct participant through which it tenders the Eligible Securities.
 
You should contact the financial institution or intermediary through which you hold your Eligible Securities well in advance of the Early Tender Deadline or the Expiration Date, as applicable, since that financial institution or intermediary may have earlier deadlines by which it must receive your instructions.  You are responsible for supplying that financial institution or other intermediary with all of the information required to complete the letter of transmittal that it submits on your behalf.  A form of the letter of transmittal, which you may use to send your instructions to the financial institution or other intermediary through which you hold your Eligible Securities, is included as Annex H to this document.  However, your custodian or other intermediary may require that you submit your instructions in a different manner.
Additional Requirements for Holders located in Germany and Italy
Beneficial owners of Eligible Securities located in Germany and Italy must sign and submit a paper letter of transmittal to the financial institution or other intermediary through which they hold their Eligible Securities prior to or on (as such financial institution or other intermediary may direct) the Early Tender Deadline or the Expiration date, as applicable.  In addition, beneficial owners of Eligible Securities located in Italy must instruct the financial institution or other intermediary through which they hold their Eligible Securities to deliver their signed paper letter of transmittal to the information agent by the applicable deadline (or you must deliver it directly to the information agent, if you are a direct participant in a principal clearing system).  The forms of the paper letter of transmittal to be submitted by beneficial owners located in Germany and Italy are available from the information agent.
 
Once a paper letter of transmittal has been submitted to such a financial institution or other intermediary, each financial institution or intermediary must submit a letter of transmittal in electronic form to the information agent, as described under “—Holders located outside of Germany and Italy” above and must deliver the paper letter of transmittal to the information agent upon its request.
 
 
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Detailed instructions for direct participants in a principal clearing system and for custodians and other financial intermediaries are set forth in Annexes E-1 and E-2, respectively.
 
Questions related to the submission of letters of transmittal should be directed to the information agent at its address on the back cover of this document.
Confidentiality of Beneficial Ownership Information
Argentina and the information agent have agreed that they will maintain the confidentiality of the information contained in the letter(s) of transmittal relating to the identity and contact information of the beneficial owners and any administrative, litigation, arbitral or other legal proceedings against Argentina relating to the Eligible Securities tendered, and to store, process and use the data contained in such letter(s) of transmittal only to the extent required for the settlement of the Invitation, for litigation reconciliation purposes or for the exercise by Argentina of any rights under the representations, warranties and undertakings given in connection with the Invitation.
Holders in Luxembourg
Holders of Eligible Securities in Luxembourg may contact the information agent for assistance in effecting their tenders in accordance with these procedures.
Special Procedures for Eligible Securities Subject to Outstanding Judgments or Pending Legal or Arbitral Proceedings
Special procedures, including additional documentation, may be required if your Eligible Securities are (i) the subject of an outstanding payment order, judgment, arbitral award or other such order against Argentina, (ii) the subject of a pending administrative, litigation, arbitral or other legal proceeding against Argentina, whether or not you have agreed not to trade those Eligible Securities, or (iii) are subject to a “blocking instruction” or other restriction on transfer.  These procedures are described under “Terms of the Invitation—Tender Procedures—Special Procedures for Eligible Securities Subject to Outstanding Judgments or Pending Legal or Arbitral Proceedings” in this document.
Tax Consequences
Please see the section entitled “Taxation” for important information regarding the possible U.S., Luxembourg, Argentine, Austrian, German, Dutch, Spanish and U.K. tax consequences for tendering holders who exchange Eligible Securities for New Securities.
Holders Outside the United States that May Participate in the Invitation
This document and the accompanying prospectus do not constitute an offer to participate in the Invitation to any person in any jurisdiction where it is unlawful to make such an offer.  Offers to holders in Austria, Belgium, Denmark, France, Germany, Ireland, Luxembourg, the Netherlands, Portugal, Spain and the United Kingdom will be made only pursuant to the PD Prospectus, which will incorporate the information contained in this document and the accompanying prospectus and will indicate on the front cover thereof if it can be used for such offers.
 
Offers to holders in Italy will be made only pursuant to an authorization granted by CONSOB to publish an offer document pursuant to Article 102 of Legislative Decree No. 58 of February 24, 1998.  Offers to persons outside of the United States, Japan and the jurisdictions listed above will be
 
 
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  made only pursuant to this document or the PD Prospectus and only in accordance with the offering restrictions set forth herein.  For a description of certain restrictions applicable to holders outside of the United States, see the “Global Offering,” “Certain Legal Restrictions” and “Jurisdictional Restrictions.”
Global Coordinator
Barclays Capital Inc.
International Joint Dealer Managers
Barclays Capital Inc., Citigroup Global Markets Inc. and Deutsche Bank Securities Inc.
Information Agent
Georgeson S.r.l. will act as information agent for the Invitation.  The address and telephone number of the information agent can be found on the back cover page of this document.
Exchange Agent
The Bank of New York Mellon will act as exchange agent for the Invitation.  The address and telephone number of the exchange agent can be found on the back cover page of this document.
Luxembourg Listing
Agent
The Bank of New York Mellon (Luxembourg) S.A.  will act as Luxembourg listing agent for the listing of the New Securities on the Luxembourg Stock Exchange.  The address and telephone number of the Luxembourg listing agent can be found on the back cover page of this document.
U.S.–European Trustee
The Bank of New York Mellon will act as trustee for holders of New Securities governed by either New York law or English law.  The address of the U.S.-European trustee can be found on the back cover page of this document.
International Joint Dealer Managers’ Fee Payable by Tendering Holders of Pre-2005 Eligible Securities
Argentina is not compensating the international joint dealer managers for their role in the Invitation and under no circumstances will Argentina be liable for payment of any fee to the international joint dealer managers for their role in the Invitation.
  The international dealer managers will therefore charge you a fee in respect of any Pre-2005 Eligible Securities that you tender and Argentina accepts in the Invitation.  By participating in the Invitation, you agree to pay that fee.  The international joint dealer managers’ fee is equal to U.S.$0.004, €0.004, Ps. 0.004, ₤0.004, Sfr.0.004 or ¥0.004 per U.S.$1.00, €1.00, Ps.1.00, ₤1.00, Sfr.1.00 or ¥1.00, respectively, in Eligible Amount of Pre-2005 Eligible Securities that you tender and Argentina accepts in the Invitation.  That fee will be paid to the international joint dealer managers in 2017 Globals, in the case of the Discount Option, or cash, in the case of the Par Option.  In the case of the Par Option, the cash payment of the fee will be payable in the same currency as the cash payment you receive as part of your Total Consideration.  The principal amount of 2017 Globals or cash to be delivered in payment of the fee will be determined by (i) applying the fee in the applicable currency to the aggregate Eligible Amount in such currency of Pre-2005 Securities that you tender and Argentina accepts in the Invitation, (ii) in the case of Eligible Amounts denominated in a currency other than the currency of the 2017 Globals or the cash you must deliver, translating the resulting amount into the currency of such 2017 Globals or the cash payment at the FX Rate 2010, (iii) in the case of holders of Pre-2005 Eligible Securities who elect or are allocated the Discount
 
 
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  Option, dividing the resulting amount by the 2017 Globals Issue Price, and (iv) rounding downward the resulting amount, if necessary, to the nearest (x) U.S.$1.00, in the case of fees payable in 2017 Globals or (y) U.S.$0.01, €0.01 or Ps.0.01, as applicable, in the case of fees payable in cash, as more fully described under “Plan of Distribution—Dealer Manager Agreement.”  As a result of movements in foreign currency rates and, in the case of the 2017 Globals, the secondary market price of the 2017 Globals on the Early Settlement Date and the Final Settlement Date, the value of the 2017 Globals may be more or less than the original nominal amount of the fee determined on the basis of Eligible Amount.  See “Risk Factors—Risks Factors Relating to the Invitation—Risks of Participating in the Invitation—There is no established trading market for the New Securities, which will not be fungible with the 2005 Discounts or the 2005 Pars; the price at which the New Securities will trade in the secondary market is uncertain.”
Retail Processing Fee
Each retail processing dealer (as referred to below) who successfully processes tenders from a retail beneficial owner (as defined below) of Pre-2005 Eligible Securities will be eligible to receive a fee payable in U.S. dollars or euros (which we refer to as the “retail processing fee”) from the international joint dealer managers based on the outstanding principal amount of Pre-2005 Eligible Securities tendered by such retail processing dealer on behalf of such retail beneficial owner and accepted pursuant to the Invitation.  Under no circumstances will Argentina be liable for payment of the retail processing fee nor will Argentina reimburse the international joint dealer managers for their payment of that fee.
  The amounts in U.S. dollars or euros to be paid are as follows:
 
Outstanding Principal Amount
of Pre-2005 Eligible Securities
Tendered and Accepted
 
 
 
Retail Processing
Fee (U.S.$)
 
 
 
Retail Processing
Fee (EUR)
 
 
Per 100 U.S. dollars
 
0.05000
 
0.03735
 
 
Per 100 euro
 
0.06694
 
0.05000
 
 
Per 100 pounds sterling
 
0.07703
 
0.05753
 
 
Per 100 Swiss francs
 
0.04669
 
0.03488
 
 
Per 10,000 yen
 
0.05369
 
0.04010
 
 
Per 100 pesos
 
0.01293
 
0.00966
 
 
The retail processing fee will only be paid to each retail processing dealer who is properly designated as “retail processing dealer” by registering as such with the information agent through the Invitation Website, at http://www.argentina2010offer.com/rpf, and providing all necessary information.  In addition, the international joint dealer managers reserve the right to request additional information from such a registrant in order to validate any retail processing fee payment claims.
 
Only direct participants in the relevant principal clearing system will be eligible to register as retail processing dealers.  If you are not a direct participant, you must instruct the direct participant through which you tender Pre-2005 Eligible Securities on behalf of retail beneficial owners to register as a retail processing dealer on your behalf.  A “retail beneficial owner” of Eligible Securities is a beneficial owner of Eligible Securities whose tendered Eligible Securities of all series have, in the aggregate, an outstanding principal amount not exceeding U.S.$250,000 or the equivalent, using the applicable FX Rate Launch.
 
     

 
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Summary of Consideration for Pre-2005 Eligible Securities
 
The following chart summarizes the New Securities you will receive if you tender Pre-2005 Eligible Securities pursuant to the Invitation, Argentina accepts your tender and your tendered Pre-2005 Eligible Securities are cancelled.
 
  If your Pre-2005 Eligible Security has:
And you elect:
  You will receive:
Currency
Governing Law
Option
New Securities
or Cash Payment
Currency
Governing Law
Exchange Ratio
(Applicable to
Discounts and
Pars only)*
U.S. Dollars
New York
English
Discount Option**
Discounts
2017 Globals
GDP-linked Securities
U.S. dollars
U.S. dollars
U.S. dollars
New York
New York
New York
0.337
Par Option***
Pars
Cash payment
GDP-linked Securities
U.S. dollars
U.S. dollars
U.S. dollars
New York
N/A
New York
1.000
U.S. Dollars
Argentine
Discount Option**
Discounts
2017 Globals
GDP-linked Securities
U.S. dollars
U.S. dollars
U.S. dollars
Argentine
New York
Argentine
0.337
Par Option***
Pars
Cash payment
GDP-linked Securities
U.S. dollars
U.S. dollars
U.S. dollars
Argentine
N/A
Argentine
1.000
Euro (or any predecessor currency to the Euro)
English
German
Italian
Spanish
New York
Discount Option**
Discounts
2017 Globals
GDP-linked Securities
Euro
U.S. dollars
Euro
English
New York
English
0.337
Par Option***
Pars
Cash payment
GDP-linked Securities
Euro
Euro
Euro
English
N/A
English
1.000
Pounds Sterling
English
Discount Option**
Discounts
2017 Globals
GDP-linked Securities
Euro
U.S. dollars
Euro
English
New York
English
0.478
Par Option***
Pars
Cash payment
GDP-linked Securities
Euro
Euro
Euro
English
N/A
English
1.419
Swiss Francs
Swiss
Discount Option**
Discounts
2017 Globals
GDP-linked Securities
Euro
U.S. dollars
Euro
English
New York
English
0.216
Par Option***
Pars
Cash payment
GDP-linked Securities
Euro
Euro
Euro
English
N/A
English
0.640
Yen****
English
Discount Option**
Discounts
2017 Globals
GDP-linked Securities
Euro
U.S. dollars
Euro
English
New York
English
0.249
Par Option***
Pars
Cash payment
GDP-linked Securities
Euro
Euro
Euro
English
N/A
English
0.740
Pesos
Argentine
English
New York
Discount Option**
Discounts
2017 Globals
GDP-linked Securities
Pesos
U.S. dollars
Pesos
Argentine
New York
Argentine
0.337
Par Option***
Pars
Cash payment
GDP-linked Securities
Pesos
Pesos
Pesos
Argentine
N/A
Argentine
1.000
 
N/A = Not applicable.
* Calculated using currency exchange rates at December 31, 2003, and applied to the Eligible Amount.  In the case of yen-denominated Pre-2005 Eligible Securities, the exchange ratio is applied per ¥100.
** Includes Discounts and related New Securities issued to holders whose Par Option election is subject to proration.
*** Subject to the Par Option Limit per Holder, the Par Option Maximum and the allocation procedure described in this document.
**** While holders of yen-denominated Pre-2005 Eligible Securities governed by Japanese law will not be able to participate in the Invitation, they may be able to do so pursuant to the invitation in Japan, which Argentina may conduct concurrently with the Invitation or as soon as practicable thereafter.  Argentina, however, will only launch an offer in Japan after having received all necessary regulatory approvals from Japanese authorities.  See “Global Offering―Invitation in Japan.”.
 
 

     

 
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Terms of the Invitation Applicable Only to Holders of 2005 Eligible Securities
 
You should review the risks described under “Risk Factors—Risk Factors Relating to the Invitation—Risk of Participating in the Invitation— Participation in the Invitation may be unattractive to holders of 2005 Eligible Securities” before making a decision whether to participate in the Invitation.
 
This offer is being made in accordance with the terms of the “Rights Upon Future Offers” provisions in the 2005 Eligible Securities.
Options; Limits
Subject to the terms and conditions of the Invitation described in this document, holders of 2005 Eligible Securities may elect or may be allocated the Discount Option or Par Option with respect to the 2005 Eligible Securities they tender that are accepted by Argentina.
 
Your right to elect the Par Option is, however, subject to the Par Option Limit per Holder, described above under “Terms of the Invitation—Options.”
  Your election of the Par Option is also subject to proration in the event that the U.S. dollar equivalent of the principal amount of Pars that would be issued in respect of all Eligible Securities for which the Par Option is elected (after application of the Par Option Limit per Holder) exceeds the Par Option Maximum, as described above under “Terms of the Invitation—Limitation on Issuance and Allocation of the Par Option.”
Discount Option
Tenders of 2005
Eligible Securities
Subject to the terms and conditions of the Invitation, if you elect or are allocated the Discount Option with respect to any of your 2005 Eligible Securities, you will receive a principal amount of Discounts that will vary depending on the 2005 Eligible Securities that you tender.
 
If you tender the following
Eligible Securities
 
You will receive in exchange
 
 
2005 Discounts
 
Discounts
 
 
2005 Pars
 
Discounts
 
 
2005 Quasi-Pars
 
Discounts
 
 
The Total Consideration and Consideration in respect of tenders of 2005 Eligible Securities for Discounts was formulated by Argentina with the objective of providing holders of 2005 Eligible Securities with a nearly equivalent consideration as that to be received by holders of Pre-2005 Eligible Securities that elect or are allocated the Discount Option in the Invitation, after adjusting for the factors discussed below.
 
If you tender 2005 Eligible Securities, you will not receive any 2017 Globals in the Invitation, because (a) if you tender 2005 Discounts or 2005 Pars, you (or the predecessor holder or holders of your 2005 Eligible Securities) participated in Argentina’s 2005 exchange offer, and you (or such holder or holders) have already been paid (or by the applicable settlement date will be paid) the interest payable in cash on the 2005 Discounts with respect to the period from December 31, 2003 to but excluding December 31, 2009 (including the interest paid on December 31, 2009) or the interest payable in cash on the 2005 Pars with respect to the period from December 31, 2003 to but excluding March 31, 2010 (including the interest to be paid on March 31, 2010), or (b) if you tender
 
 
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  2005 Quasi-Pars, the adjustments to the amount of your Total Consideration or Consideration exceed the amount of interest that would have been paid on the Discounts that you will receive during the period from December 31, 2003 to but excluding December 31, 2009.
  If you tender any series of 2005 Eligible Securities, you will not receive any GDP-linked Securities in the Invitation, because the GDP-linked Securities that Argentina will issue in the Invitation are substantially the same as the 2005 GDP-linked Securities issued pursuant to Argentina’s 2005 exchange offer.  Because the GDP-linked Securities to be issued in the Invitation are substantially the same as the 2005 GDP-linked Securities, Argentina is not requiring that you tender any 2005 GDP-linked Securities together with your 2005 Eligible Securities.
  In addition, if you tender any series of 2005 Eligible Securities, the principal amount of Discounts that otherwise would have been issuable to you pursuant to the Invitation will be reduced by the aggregate amount of payments made on the GDP-linked Securities issued together with your tendered 2005 Eligible Securities during the period from their date of issue to and including December 31, 2009, because holders of Pre-2005 Eligible Securities will not receive the benefit of these payments.  The principal amount of Discounts that you receive will be determined pursuant to the formula set forth in the following section, or if you elect the Discount Option, are a Large Holder and you tender your 2005 Eligible Securities after the Early Tender Deadline, the adjusted principal amount of Discounts that you receive will be determined pursuant to the formula referred to under “—Consideration for Tenders After the Early Tender Deadline by Large Holders of 2005 Eligible Securities in Exchange for Discounts.”
 
For purposes of the Invitation, the “Eligible Amount” of your 2005 Eligible Securities will be equal to:
   ●  In the case of 2005 Discounts, the quotient of (x) the original principal amount of such 2005 Discounts divided by (y) 0.337;
   ●  In the case of 2005 Pars, the original principal amount of such 2005 Pars; and
   ●  In the case of 2005 Quasi-Pars, the quotient of (x) the original principal amount of such 2005 Quasi-Pars divided by (y) 0.699.
 
For purposes of these calculations, the “original principal amount” of any 2005 Eligible Securities means their principal amount as of December 31, 2003, without adjustment for any interest capitalized on, or any CER adjustments to the principal amount of, those 2005 Eligible Securities on or after that date.
  The Discounts issued to holders of 2005 Eligible Securities pursuant to the Invitation will not be fungible with the corresponding 2005 Discounts issued by Argentina pursuant to its 2005 exchange offer.
  The Discounts and 2017 Globals issued in exchange for Pre-2005 Eligible Securities and the corresponding Discounts and 2017 Globals issued in exchange for 2005 Eligible Securities, whether issued on the Early Settlement Date or the Final Settlement Date, will constitute part of a
 
 
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  single series of securities under the indenture for purposes of voting on amendments or modifications to their terms, acceleration of their maturity or remedies upon an event of default.  However, it is likely that the Discounts governed by New York law and the Discounts governed by English law issued in exchange for 2005 Discounts (either on the Early Settlement Date or the Final Settlement Date or both) will not have the same amount of OID for U.S. federal income tax purposes as the corresponding series of Discounts issued on the applicable settlement date in exchange for Pre-2005 Eligible Securities, 2005 Pars or 2005 Quasi-Pars.  If this is the case, the Discounts governed by New York law and/or the Discounts governed by English law issued in exchange for 2005 Discounts on the Early Settlement Date or the Final Settlement Date or both, as applicable, will be assigned different ISINs and common codes than those assigned to the corresponding series of Discounts issued in exchange for Pre-2005 Eligible Securities, 2005 Pars and 2005 Quasi-Pars and, as a result, will not trade fungibly with the corresponding Discounts issued in exchange for these other Eligible Securities.  Moreover, the Discounts governed by New York law and/or the Discounts governed by English law issued in exchange for 2005 Discounts on the Early Settlement Date will not be fungible with those issued on the Final Settlement Date.
 
In addition, it is possible that the Discounts governed by New York law, the Discounts governed by English law and/or the 2017 Globals issued on the Final Settlement Date will have a greater amount of OID for U.S. federal income tax purposes than the corresponding series of New Securities issued on the Early Settlement Date.  If this is the case, Argentina intends to calculate and report OID, if any, with respect to these New Securities based on the issue price of the New Securities issued on the Final Settlement Date.  See “Taxation—U.S. Federal Income Tax Consequences—Consequences of Holding the New Securities—Qualified Stated Interest and Original Issue Discount on the New Bonds” for further information.
Total Consideration for Tenders of 2005 Eligible Securities in Exchange for Discounts
Subject to the terms and conditions of the Invitation, if you are (i) a Large Holder that elects the Discount Option and tenders your 2005 Eligible Securities prior to the Early Tender Deadline, (ii) a Large Holder that tenders your 2005 Eligible Securities prior to the Expiration Date and elects the Par Option but is allocated Discounts or (iii) a Small Holder that tenders your 2005 Eligible Securities prior to the Expiration Date and elects or is allocated Discounts, the Total Consideration that you will receive will be determined in accordance with the following formula:
   A = B * 0.337 - ( C + D - E + F )
  G
  Where:  
  A= The original principal amount of Discounts that you will receive in exchange for your 2005 Eligible Securities;
  B=
The Eligible Amount of the 2005 Eligible Securities that you tender and Argentina accepts in the Invitation;
 
 
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  C= Your “Reinvestment Amount,” which is the sum of (x) if you tender 2005 Discounts or 2005 Pars, the product of the original principal amount of 2005 Discounts or 2005 Pars that you tender and Argentina accepts in the Invitation and the amount set out in the column “2005 Discounts” or “2005 Pars” that corresponds to the 2005 Eligible Securities you tender plus (y) the product of the notional amount of GDP-linked Securities that correspond to the original principal amount of 2005 Eligible Securities that you tender and Argentina accepts in the Invitation times the amount set out in the column “GDP-linked Securities” in the following table, in each case for the currency in which your 2005 Discounts or 2005 Pars are denominated, rounded downward, if necessary, to 2 decimal places:
 
Per
 
2005
Discounts
 
2005
Pars
 
GDP-linked
Securities
 
                 
 
U.S.$1.00
 
U.S.$0.0256
 
U.S.$0.0082
 
U.S.$0.0019
 
 
€1.00
 
€0.0232
 
€0.0071
 
€0.0023
 
 
Ps.1.00
 
Ps.0.0696
 
Ps.0.0148
 
Ps.0.0099
 
    The Reinvestment Amount represents the amount of interest income that you (or the predecessor holder or holders of your 2005 Eligible Securities) could have earned on (a) if you tender 2005 Discounts or 2005 Pars, the interest Argentina paid in cash on your 2005 Discounts or 2005 Pars, as applicable, with respect to the period from December 31, 2003 to but excluding December 31, 2009 (including interest that was paid on December 31, 2009), if you tender 2005 Discounts, or September 30, 2009 (including interest that was paid on September 30, 2009), if you tender 2005 Pars and (b) the payments that Argentina made on the GDP-linked Securities issued together with your 2005 Eligible Securities during the period from June 2, 2005 to but excluding December 31, 2009 (including the payment made on December 15, 2009), if you had reinvested the amount of each such payment when made at the applicable Deemed Reinvestment Rate for each Reinvestment Period, assuming semi-annual compounding;
   D= Your “GDP-linked Securities Adjustment Amount” which equals the aggregate amount of the payments that Argentina made on the GDP-linked Securities issued together with your 2005 Eligible Securities during the period from June 2, 2005 to but excluding December 31, 2009 (including the payment made on December 15, 2009), rounded downward, if necessary, to 2 decimal places;
   E=
Your “Interest Adjustment Amount,” which equals:
     ●
If you tender 2005 Discounts, (x) the product of (A) the amount of interest paid in cash on the 2005 Discounts you tender with respect to the period from December 31, 2003 to but excluding December 31, 2009 (i.e., U.S.$0.2907576, €0.2726930 or Ps. 0.2657117 for each U.S.$1.00, €1.00 or
 
 
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      Ps. 1.00, respectively, of 2005 Discounts you tender) multiplied by (B) the 2017 Globals Issue Price, rounded downward, if necessary, to 2 decimal places; minus (y) the amount in clause (x)(A) above, rounded downward, if necessary, to 2 decimal places;
   
If you tender 2005 Pars (x) the product of (A) the amount of interest that would have been paid to you in cash in respect of 2005 Discounts with respect to the period from and including December 31, 2003 to but excluding December 31, 2009 (including interest that would have been paid on December 31, 2009) if you (or the predecessor holder or holders of your 2005 Pars) had elected to receive 2005 Discounts in Argentina’s 2005 exchange offer instead of 2005 Pars multiplied by (B) the 2017 Globals Issue Price, rounded downward, if necessary, to 2 decimal places, minus (y) the sum of the amount of interest that was paid in cash to you (or the predecessor holder or holders of your 2005 Pars) with respect to the period from December 31, 2003 to but excluding March 31, 2010 (including interest that was paid on March 31, 2010), rounded downward, if necessary, to 2 decimal places.  This interest calculation will include (i) interest paid in cash on both the original principal amount of the corresponding 2005 Discounts and on the adjustments made to the principal amount of the 2005 Discounts in respect of capitalized interest and (ii) if you tender peso-denominated 2005 Pars, interest paid in cash on the adjustments made to the principal amount of your 2005 Pars and the corresponding 2005 Discounts in respect of Argentine inflation, based on the CER; or
     ●
If you tender 2005 Quasi-Pars, the product of (A) the amount of interest that would have been paid to you in cash in respect of 2005 Discounts with respect to the period from and including December 31, 2003 to but excluding December 31, 2009 (including interest that would have been paid on December 31, 2009) if you (or the predecessor holder or holders of your 2005 Quasi-Pars) had elected to receive 2005 Discounts in Argentina’s 2005 exchange offer instead of 2005 Quasi-Pars, multiplied by (B) the 2017 Globals Issue Price, and rounded downward, if necessary, to 2 decimal places.  This interest calculation will include (x) interest paid in cash on both the original principal amount of the corresponding 2005 Discounts and on the adjustments made to the principal amount of the 2005 Discounts in respect of capitalized interest and (y) interest paid in cash on the adjustments made to the principal amount of the corresponding 2005 Discounts in respect of Argentine inflation, based on the CER;
   F=
The exchange fee, which is equal to U.S.$0.004, €0.004 or Ps. 0.004 per U.S.$1.00, €1.00 or Ps. 1.00, respectively, in Eligible Amount of 2005 Eligible Securities that you tender and Argentina accepts in the Invitation, rounded downward, if necessary, to 2 decimal places;
 
 
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   G= The 2005 Discounts Trading Price for the 2005 Discounts denominated in the same currency as the Discounts that you will receive.
   The Reinvestment Amount adjusts for the fact that holders of Pre-2005 Eligible Securities will receive 2017 Globals in respect of the amount of interest paid in cash by Argentina on the 2005 Discounts through December 31, 2009, without any adjustment for loss of reinvestment income, whereas holders of 2005 Eligible Securities (or their predecessor holders) that elect to participate in the Invitation received and were able to reinvest the cash interest payments paid on those securities and all payments on the GDP-linked Securities through December 31, 2009, at the time they were made.
 
The GDP-linked Securities Adjustment Amount adjusts for the fact that holders of Pre-2005 Eligible Securities will not receive any payments made on the GDP-linked Securities with respect to the period from June 2, 2005 to but excluding December 31, 2009, while holders of 2005 Eligible Securities (or their predecessor holders) received all previous payments on the GDP-linked Securities.
 
The Interest Adjustment Amount adjusts the amount of Discounts to be issued in exchange for 2005 Discounts, 2005 Pars and 2005 Quasi-Pars (a) to reflect the shortfall between the aggregate amount of cash interest paid on the 2005 Pars (or zero, in the case of Quasi-Pars) and the aggregate amount of cash interest that the same holder would have received had such holder elected to receive 2005 Discounts in Argentina’s 2005 exchange and (b) to reflect the fact that holders of 2005 Discounts and 2005 Pars have received interest payments in cash on their 2005 Eligible Securities without any discount, while holders of Pre-2005 Eligible Securities that elect or are allocated the Discount Option will receive 2017 Globals in respect of interest for the period from December 31, 2003 through December 31, 2009 issued at a price less than par.
  The exchange fee is roughly equivalent to the fee payable by holders of Pre-2005 Eligible Securities to the international joint dealer managers.  Holders of 2005 Eligible Securities do not have to pay a fee to the international joint dealer managers.
 
The aggregate original principal amount of Discounts that you receive will be rounded downward to the nearest one currency unit (e.g., U.S.$1.00).
 
Hypothetical examples of the calculation of the Total Consideration in respect of the exchange of the 2005 Eligible Securities for Discounts, including the principal amount of Discounts that you may receive, the principal amount of 2017 Globals that you may receive, if applicable, and the deduction of the exchange fee are set forth in Annex F-2.
 
 
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Consideration for Tenders After the Early Tender Deadline by Large Holders of 2005 Eligible Securities in Exchange for Discounts
Subject to the terms and conditions of the Invitation, if you elect the Discount Option, are a Large Holder and you tender your 2005 Eligible Securities after the Early Tender Deadline, you will receive the applicable Total Consideration minus a principal amount of Discounts equal to U.S.$0.01, €0.01or Ps.0.01 per U.S.$1.00, €1.00 or Ps.1.00, respectively, in Eligible Amount of 2005 Eligible Securities that you tender and Argentina accepts.
 
The aggregate original principal amount of Discounts that you receive will be rounded downward to the nearest one currency unit (e.g., U.S.$1.00).
Par OptionTenders of 2005 Eligible Securities
Subject to the terms and conditions of the Invitation, if you elect, and to the extent that you or are allocated, the Par Option with respect to any of your 2005 Eligible Securities, you will receive a principal amount of Pars that will vary depending on the 2005 Eligible Securities that you tender.
 
If you tender the following
Eligible Securities
 
You will receive in exchange
 
 
2005 Discounts
 
Pars
 
 
2005 Pars
 
Pars
 
 
2005 Quasi-Pars
 
Pars
 
 
The Total Consideration in respect of tenders of 2005 Eligible Securities for Pars was formulated by Argentina with the objective of providing holders of 2005 Eligible Securities with a nearly equivalent consideration as that to be received by holders of Pre-2005 Eligible Securities that elect and are allocated the Par Option in the Invitation, after adjusting for the factors discussed below.
 
You will not receive any cash payment in the Invitation, because you (or the predecessor holder or holders of your 2005 Eligible Securities) participated in Argentina’s 2005 exchange offer, and you (or such holder or holders) have already been paid (or by the Final Settlement Date will be paid): (i) if you tender 2005 Pars, the interest payable in cash on the 2005 Pars with respect to the period from December 31, 2003 to but excluding March 31, 2010 (including the interest paid on March 31, 2010) or, if you tender 2005 Discounts, cash payments of interest in an aggregate amount exceeding the interest payable on the 2005 Pars and (ii) the payments made on the 2005 GDP-linked Securities issued together with your 2005 Eligible Securities.
 
In addition, if you tender any series of 2005 Eligible Securities, the principal amount of Pars that otherwise would have been issuable to you pursuant to the Invitation will be reduced by the aggregate amount of payments made on the GDP-linked Securities issued together with your tendered 2005 Eligible Securities during the period from their date of issue to and including December 31, 2009, because holders of Pre-2005 Eligible Securities will not receive the benefit of these payments.
 
 
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If you tender any series of 2005 Eligible Securities, you will not receive any GDP-linked Securities in the Invitation, because the GDP-linked Securities that Argentina will issue in the Invitation are substantially the same as the 2005 GDP-linked Securities issued pursuant to Argentina’s 2005 exchange offer.  Because the GDP-linked Securities to be issued in the Invitation are substantially the same as the 2005 GDP-linked Securities, Argentina is not requiring that you tender any 2005 GDP-linked Securities together with your 2005 Eligible Securities.
 
The Pars issued to holders of 2005 Eligible Securities pursuant to the Invitation will not be fungible with the corresponding 2005 Pars issued by Argentina pursuant to its 2005 exchange offer.
 
The Pars issued in exchange for Pre-2005 Eligible Securities and the corresponding Pars issued in exchange for 2005 Eligible Securities will constitute part of a single series of securities under the indenture for purposes of voting on amendments or modifications to their terms, acceleration of their maturity or remedies upon an event of default.  However, it is likely that the Pars governed by New York law and the Pars governed by English law issued in exchange for 2005 Pars will not have the same amount of OID for U.S. federal income tax purposes as the corresponding series of Pars issued in exchange for Pre-2005 Eligible Securities, 2005 Discounts or 2005 Quasi-Pars.  If this is the case, the Pars governed by New York law and/or the Pars governed by English law issued in exchange for 2005 Pars will be assigned different ISINs and common codes than those assigned to the corresponding series of Pars issued in exchange for Pre-2005 Eligible Securities, 2005 Discounts or 2005 Quasi-Pars and, as a result, will not trade fungibly with the corresponding Pars issued in exchange for those other Eligible Securities.
Total Consideration for Tenders of 2005 Eligible Securities in Exchange for Pars
 Subject to the terms and conditions of the Invitation, if you elect, and to the extent that you are allocated, the Par Option, with respect to any of your 2005 Eligible Securities, you will receive an original principal amount of Pars in exchange determined in accordance with the following formula:
   A = B -( C + D + E + F + G - H )
  I
  Where:  
  A= The original principal amount of Pars that you will receive in exchange for your 2005 Eligible Securities;
  B=
The Eligible Amount of the 2005 Eligible Securities that you tender and Argentina accepts in the Invitation (adjusted to reflect any proration);
  C= If you tender 2005 Discounts, (a) the amount of interest that was paid in cash to you (or the predecessor holder or holders of your 2005 Discounts) with respect to the period from December 31, 2003 to but excluding December 31, 2009 (including interest that was paid on December 31, 2009), and rounded downward,
 
 
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    if necessary, to 2 decimal places; minus (b) the amount of interest that would have been paid on the Pars that you will receive with respect to the period from and including December 31, 2003 to but excluding September 30, 2009 (including interest that would have been paid on September 30, 2009) if your Pars had been outstanding during that period and accrued interest at the rate applicable to the corresponding series of 2005 Pars, rounded downward, if necessary, to 2 decimal places.  These interest calculations will include (i) interest paid or payable in cash on the original principal amount of the corresponding 2005 Discounts and Pars, as applicable, and, in the case of the calculation pursuant to clause (a) above, on adjustments made to the principal amount of the 2005 Discounts in respect of capitalized interest and (ii) if you tender peso-denominated 2005 Discounts, interest paid in cash on the adjustments made to the principal amount of your 2005 Discounts and the corresponding 2005 Pars in respect of Argentine inflation, based on the CER;
  D= If you tender 2005 Pars, the amount of interest that was paid to you in respect of your 2005 Pars on March 31, 2010 for the period from September 30, 2009 to but excluding March 31, 2010.  If you tender peso-denominated 2005 Pars, this interest calculation will include interest paid in cash on the adjustments made to the principal amount of your 2005 Pars in respect of Argentine inflation, based on the CER;
  E= Your “Reinvestment Amount,” which is the sum of (x) if you tender 2005 Discounts or 2005 Pars, the product of the original principal amount of 2005 Discounts or 2005 Pars that you tender and Argentina accepts in the Invitation times the amount set out in the column “2005 Discounts” or “2005 Pars” that corresponds to the 2005 Eligible Securities you tender or, if you tender 2005 Quasi-Pars, zero, plus (y) the product of the notional amount of GDP-linked Securities that corresponds to the original principal amount of 2005 Eligible Securities that you tender and Argentina accepts in the Invitation times the amount set out in the column “GDP-linked Securities” in the following table, in each case for the currency in which your 2005 Eligible Securities are denominated, rounded downward, if necessary, to 2 decimal places:
 
Per
 
2005
Discounts
 
2005
Pars
 
GDP-linked
Securities
 
                 
 
U.S.$1.00
 
U.S.$0.0256
 
U.S.$0.0082
 
U.S.$0.0019
 
 
€1.00
 
€0.0232
 
€0.0071
 
€0.0023
 
 
Ps.1.00
 
Ps.0.0696
 
Ps.0.0148
 
Ps.0.0099
 
    The Reinvestment Amount represents the amount of interest income that you (or the predecessor holder or holders of your 2005 Eligible Securities) could have earned on (a) if you tender 2005 Discounts or 2005 Pars, the interest Argentina paid in cash on your 2005 Discounts or 2005 Pars, as applicable, with respect to the period from December 31, 2003 to but excluding December 31, 2009 (including interest that was paid on December 31,
 
 
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    2009), if you tender 2005 Discounts, or September 30, 2009 (including interest that was paid on September 30, 2009), if you tender 2005 Pars and (b) the payments that Argentina made on the GDP-linked Securities issued together with your 2005 Eligible Securities during the period from June 2, 2005 to but excluding December 31, 2009, if you had reinvested the amount of each such payment when made at the applicable Deemed Reinvestment Rate for each Reinvestment Period, assuming semi-annual compounding;
   F= Your “GDP-linked Securities Adjustment Amount”, which equals the aggregate amount of the payments that Argentina made on the GDP-linked Securities issued together with your 2005 Eligible Securities during the period from June 2, 2005 to but excluding December 31, 2009 (including the payment made on December 15, 2009), rounded downward, if necessary, to 2 decimal places;
  G=
The exchange fee, which is equal to U.S.$0.004, €0.004 or Ps.0.004 per U.S.$1.00, €1.00 or Ps.1.00, respectively, in Eligible Amount of 2005 Eligible Securities that you tender and Argentina accepts in the Invitation, rounded downward, if necessary, to 2 decimal places;
  H= If you tender 2005 Quasi-Pars, the amount of interest that would have been paid to you in cash in respect of 2005 Pars with respect to the period from and including December 31, 2003 to but excluding September 30, 2009 (including interest that would have been paid on September 30, 2009) if you (or the predecessor holder or holders of your 2005 Quasi-Pars) had elected to receive 2005 Pars in Argentina’s 2005 exchange offer instead of 2005 Quasi-Pars, rounded downward, if necessary, to 2 decimal places.  This interest calculation will include (x) interest paid in cash on the original principal amount of the corresponding 2005 Pars and (y) interest paid in cash on the adjustments made to the principal amount of the corresponding 2005 Pars in respect of Argentine inflation, based on the CER; and
  I=
The 2005 Pars Trading Price for the 2005 Pars denominated in the same currency as the Pars that you will receive.
  The Reinvestment Amount adjusts for the fact that holders of Pre-2005 Eligible Securities will receive a cash payment in respect of the amount of interest paid in cash by Argentina on the 2005 Pars through September 30, 2009, without any adjustment for loss of reinvestment income, whereas holders of 2005 Eligible Securities (or their predecessor holders) that elect to participate in the Invitation received and were able to reinvest those cash payments (if they tender 2005 Discounts or 2005 Pars), and all payments on the GDP-linked Securities through December 31, 2009, at the time they were made. 
 
The GDP-linked Securities Adjustment Amount adjusts for the fact that holders of Pre-2005 Eligible Securities will not receive any payments made on the GDP-linked Securities with respect to the period from June 2, 2005 to but excluding December 31, 2009, while holders of 2005 Eligible Securities (or their predecessor holders) received all previous payments on the GDP-linked Securities.
 
 
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The adjustment in D above reflects the fact that the Pars will accrue interest from September 30, 2009, but holders of 2005 Pars have already received an interest payment on March 31, 2010 for the period from September 30, 2009 to but excluding March 31, 2010.
 
The adjustment in H above increases the principal amount of Pars to be issued in exchange for 2005 Quasi-Pars to reflect the fact that holders of 2005 Quasi-Pars did not receive any cash interest payments on their securities in respect of the period from December 31, 2003 to but excluding September 30, 2009.
 
The exchange fee is roughly equivalent to the fee payable by holders of Pre-2005 Eligible Securities to the international joint dealer managers.  Holders of 2005 Eligible Securities do not have to pay a fee to the international joint dealer managers.
 
The aggregate original principal amount of Pars that you receive will be rounded downward to the nearest one currency unit (e.g., U.S.$1.00).
  Hypothetical examples of the calculation of the Total Consideration in respect of the exchange of 2005 Eligible Securities for Pars, including the principal amount of Pars and the deduction of the exchange fee, are set forth in Annex F-2.
Adjustments to Total Consideration and Consideration to reflect Settlement Delays
In the event that the Early Settlement Date or Final Settlement Date is delayed for any reason past the record date for any future interest payment on the 2005 Discounts or 2005 Pars (other than the record date for the March 31, 2010 interest payment date on the 2005 Pars, Argentina, if it deems it necessary, may, without the consent of any tendering holder, adjust the Total Consideration and Consideration deliverable to holders of 2005 Eligible Securities to the extent necessary to take into account such interest payments.
Summary of Consideration for 2005 Eligible Securities
The following chart summarizes the New Securities you will receive if you tender 2005 Eligible Securities pursuant to the Invitation, Argentina accepts your tender and your tendered 2005 Eligible Securities are cancelled.
If your 2005 Eligible Security has:***
And you elect:
You will receive:
Currency
Governing Law
Option
New Securities
Currency
Governing Law
U.S. Dollars
New York
Discount Option*
Discounts
U.S. dollars
New York
Par Option**
Pars
U.S. dollars
New York
U.S. Dollars
Argentine
Discount Option*
Discounts
U.S. dollars
Argentine
Par Option**
Pars
U.S. dollars
Argentine
Euro
English
Discount Option*
Discounts
Euro
English
Par Option**
Pars
Euro
English
Pesos
Argentine
Discount Option*
Discounts
Pesos
Argentine
Par Option**
Pars
Pesos
Argentine
 
* Includes Discounts issued to holders whose Par Option election is subject to proration.
** Subject to the Par Option Limit per Holder, the Par Option Maximum and the allocation procedure described in this document.
*** While holders of yen-denominated 2005 Eligible Securities governed by Japanese law will not be able to participate in the Invitation, they may be able to do so pursuant to the invitation in Japan, which Argentina may conduct concurrently with the Invitation or as soon as practicable thereafter.  Argentina, however, will only launch an offer in Japan after having received all necessary regulatory approvals from Japanese authorities.  See “Global Offering―Invitation in Japan.”
 
 
 

     

 
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 Common Terms of the New Securities
 
The following terms will apply to all New Securities, except as otherwise noted:
   
Issuer
The Republic of Argentina
   
Securities Offered
Discount Bonds due December 31, 2033:
     
     U.S. dollar-denominated Discounts governed by New York law;
   ●  U.S. dollar-denominated Discounts governed by Argentine law;
   ●  Euro-denominated Discounts governed by English law; and
   ●  Peso-denominated Discounts governed by Argentine law.
     
   Global Bonds due 2017:
   
   ●  U.S. dollar-denominated 2017 Globals governed by New York law.
   
  Par Bonds due December 31, 2038:
   
   ●  U.S. dollar-denominated Pars governed by New York law;
   ●  U.S. dollar-denominated Pars governed by Argentine law;
   ●  Euro-denominated Pars governed by English law; and
   ●  Peso-denominated Pars governed by Argentine law.
   
  GDP-linked Securities:
     
   ● GDP-linked Securities expiring no later than December 15, 2035.  Each GDP-linked Security issued in exchange for any Pre-2005 Eligible Securities will be denominated in the same currency, and governed by the same law, as the Discounts or Pars issued in exchange for the same Pre-2005 Eligible Securities.
     
 
The terms of the New Securities are described in greater detail under “Description of the New Securities” in this document.
   
Listing and Admission to Trading
Application has been made to list each series of New Securities on the Luxembourg Stock Exchange and to have the New Securities admitted to trading on the Euro MTF market of the Luxembourg Stock Exchange, and application will be made to list each series of New Securities on the Buenos Aires Stock Exchange and to have the New Securities admitted to trading on the Mercado Abierto Electrónico.
   
Claim to Full Principal
The Discounts, Pars and 2017 Globals will represent a claim to their full principal amount at maturity (plus accrued but unpaid interest) or upon earlier acceleration in accordance with the terms thereof (as described under “Description of the Securities—Default and Acceleration of Maturity” in the accompanying prospectus).  There is no principal payable in respect of the GDP-linked Securities.
   
Redemption
The New Securities will not be redeemable before maturity (although the Discounts and Pars provide for amortization payments before final maturity and the GDP-linked Securities may expire early as described below) and will not be entitled to the benefit of any sinking fund.  Nevertheless, Argentina may at any time purchase the New Securities and hold or resell them or surrender them to the U.S.-European trustee for cancellation.
 
 
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Rights Upon Future Offers
If following the expiration of the Invitation until December 31, 2014, Argentina voluntarily makes an offer to purchase or exchange or solicits consents to amend any Pre-2005 Eligible Securities not tendered or accepted pursuant to the Invitation (other than an offer on terms substantially the same as, or less favorable than, the Invitation), Argentina will take all steps necessary so that each holder of Discounts or Pars will have the right, for a period of at least 30 calendar days following the announcement of such offer, to exchange any of such holder’s Discounts or Pars for the consideration in cash or in kind received in connection with such purchase or exchange offer or securities having terms substantially the same as those resulting from such amendment process, in each case in accordance with the terms and conditions of such offer to purchase, exchange offer or amendment process.  The right of tendering holders to participate in any such transaction is subject to certain conditions described under “Description of the New Securities¾Rights Upon Future Offers.”
   
Denomination
The New Securities will be issued in denominations of one unit of the currency in which they are denominated and integral multiples thereof.
   
Form and Settlement
Argentina will issue each of the New Securities in the form of one or more global securities in fully registered form.  Upon issuance, the New Securities will be credited to the same accounts at the principal clearing systems from which the Eligible Securities in exchange for which they are issued were tendered.  If your Eligible Securities are tendered through a principal clearing system that is not the primary clearing system for the New Securities that you are entitled to receive, your New Securities will be credited first to the account of your principal clearing system at such primary clearing system and then the principal clearing system will transfer the New Securities to your account.  As an owner of a beneficial interest in the global securities, you will generally not be entitled to have your New Securities registered in your name, will not be entitled to receive certificates in your name evidencing the New Securities and will not be considered the holder of any New Securities under the indenture for the New Securities.  The New Securities will clear and settle as follows:
     
    U.S. dollar-denominated New Securities governed by New York law and euro-denominated New Securities.  Will be registered in the name of a nominee of a common depositary for Clearstream, Luxembourg and Euroclear and deposited with that common depositary.  You may hold a beneficial interest directly if you have an account with Clearstream, Luxembourg or Euroclear or indirectly through a financial institution that has an account with either of these clearing systems.  Each of Caja de Valores, Clearstream Banking AG, Iberclear, Monte Titoli S.p.A., OEKB and SIS has an account with one or both of these clearing systems.
     
   ● Peso-denominated New Securities and U.S. dollar-denominated New Securities governed by Argentine law.  Will be deposited with and registered in the name of CRYL.  You may hold a beneficial interest directly through an account with CRYL or indirectly through any institution that has an account with CRYL.  Caja de Valores has an account with CRYL.  Each of Euroclear and Clearstream, Luxembourg has an account with an Argentine depositary, which acts as a link with Caja de Valores.
 
 
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Class Voting; Fungibility
All Discounts, Pars, 2017 Globals, and GDP-linked Securities governed by New York or English law issued pursuant to the Invitation, whether on the Early Settlement Date or on the Final Settlement Date and whether issued in exchange for Pre-2005 Eligible Securities or 2005 Eligible Securities, that are denominated in the same currency and have the same governing law, will constitute part of a single series of securities under the indenture for purposes of voting on amendments or modifications to their terms and, in the case of the Discounts, Pars or 2017 Globals, for purposes of voting on acceleration of their maturity or remedies upon an event of default.  However, the Discounts and Pars and the U.S. dollar-denominated GDP-linked Securities governed by New York law issued pursuant to the Invitation will not constitute part of the same series as, or be fungible with, the corresponding series of 2005 Discounts, 2005 Pars or 2005 GDP-linked Securities issued by Argentina pursuant to its 2005 exchange offer.  All Discounts and 2017 Globals (whether issued on the Early Settlement Date or the Final Settlement Date) issued in exchange for Pre-2005 Eligible Securities, 2005 Pars or 2005 Quasi-Pars will have the same ISINs and common code and will trade fungibly with each other.  However, it is possible that the Discounts governed by New York or English law and/or the 2017 Globals issued on the Final Settlement Date will have a greater amount of OID for U.S. federal income tax purposes than the corresponding series of New Securities issued on the Early Settlement Date.  If this is the case, Argentina intends to calculate and report OID, if any, with respect to these New Securities based on the issue price of the New Securities issued on the Final Settlement Date.  See “Taxation—U.S. Federal Income Tax Consequences—Consequences of Holding the New Securities—Qualified Stated Interest and Original Issue Discount on the New Bonds” for further information.  Moreover, it is likely that (i) the Discounts governed by New York law and the Discounts governed by English law issued in exchange for Pre-2005 Eligible Securities, 2005 Pars and 2005 Quasi-Pars will not have the same amount of OID for U.S. federal income tax purposes as Discounts governed by New York or English law issued in exchange for 2005 Discounts, even if issued on the same date and (ii) the Pars governed by New York law and the Pars governed by English law issued in exchange for Pre-2005 Eligible Securities, 2005 Discounts or 2005 Quasi-Pars will not have the same amount of OID for U.S. federal income tax purposes as the corresponding series of Pars issued in exchange for 2005 Pars.  If this is the case, (a) the Discounts governed by New York law and the Discounts governed by English law issued in exchange for Pre-2005 Eligible Securities, 2005 Pars and 2005 Quasi-Pars will be assigned different ISINs and common codes than those assigned to the corresponding series of Discounts governed by New York or English law issued in exchange for 2005 Discounts and (b) the Pars governed by New York law and the Pars governed by English law issued in exchange for Pre-2005 Eligible Securities, 2005 Discounts or 2005 Quasi-Pars will be assigned different ISINs and common codes than those assigned to the corresponding series of Pars governed by New York or English law issued in exchange for 2005 Pars.
   
 
In addition, each series of GDP-linked Securities, other than the GDP-linked Securities denominated in U.S. dollars and governed by New York law, issued pursuant to the Invitation, whether issued on the Early Settlement Date or the Final Settlement Date, will constitute a further issuance of, will be assigned the same ISINs and common codes as, and will trade fungibly with, the corresponding series of 2005 GDP-linked Securities.  The ISIN and common code of the GDP-linked Securities denominated in U.S. dollars and governed by New York law issued in the Invitation will be different from the ISIN and common code of the corresponding series of 2005 GDP-linked Securities, because the primary clearing systems for the GDP-linked Securities
 
 
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  denominated in U.S. dollars and governed by New York law will be Euroclear and Clearstream, Luxembourg, rather than DTC, the primary clearing system for the corresponding series of 2005 GDP-linked Securities, but the terms and conditions of these GDP-linked Securities will otherwise be the same as the corresponding series of 2005 GDP-linked Securities.
 
The following terms will apply only to New Securities governed by New York law or English law:
   
Additional Amounts
Argentina will make payments of principal and interest in respect of the Discounts, Pars and 2017 Globals, and payments in respect of the GDP-linked Securities, without withholding or deduction for or on account of any present or future Argentine taxes, duties, assessments or governmental charges of whatever nature except as set forth in “Description of the Securities—Description of Debt Securities—Additional Amounts” in the accompanying prospectus.
   
Further Issues
Argentina may, from time to time without the consent of holders of the New Securities governed by New York law or English law, create and issue additional securities ranking pari passu with the New Securities and having the same terms and conditions as any series of the New Securities, or the same terms and conditions except for the amount of the first payment of interest or other amounts on such additional securities, or, if applicable, the initial interest or other payment date or interest accrual date.  Argentina may also consolidate the additional securities to form a single series with any outstanding series of New Securities.
Any such additional debt securities (excluding New Securities issued on the Final Settlement Date), however, may not have, for purposes of U.S. federal income taxation, a greater amount of OID than the relevant series of New Securities have as of the date of the issuance of such additional debt securities.
   
Seniority
New Securities governed by New York law or English law will be direct, unconditional, unsecured and unsubordinated obligations of Argentina, and will rank pari passu and without preference among themselves by reason of priority of date of issue or currency of payment or otherwise, and at least equally with all of Argentina’s other present and future unsecured and unsubordinated External Indebtedness (as defined in the accompanying prospectus under “Description of the Securities—Description of Debt Securities—Negative Pledge”).
   
The following terms will apply only to New Securities governed by Argentine law:
 
Inflation Adjustment
The outstanding principal amount of all Discounts and Pars denominated in pesos will be adjusted for inflation based on the CER, a unit of account whose value in pesos is indexed to consumer price inflation in Argentina.  The CER is published by the Central Bank of Argentina on a monthly basis.  The amount of principal amortizations on the Discounts and Pars denominated in pesos will be adjusted over time to reflect the CER-adjusted principal amount of these securities, which will increase whenever Argentina experiences inflation and will decrease if Argentina experiences deflation.  Likewise, the amount of interest that accrues on these securities will be determined on the CER-adjusted principal amount.
 
 
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The CER-adjusted principal amount of any peso-denominated Discounts or Pars will be determined by the Office of National Public Credit of the Ministry of Economy and Public Finance of Argentina prior to the date on which any principal and/or interest payments on such securities is due (in the case of interest, whether payable in cash or capitalized).  The Office of National Public Credit will determine this CER-adjusted principal amount by multiplying (x) the original principal amount of the peso-denominated Discounts or Pars as of December 31, 2003, by (y) a fraction, the numerator of which is equal to the CER corresponding to the 10-day period immediately preceding the relevant payment date (or the 10-day period immediately preceding March 30, 2010, in the case of the first interest payment on the Pars, or June 30, 2010, in the case of the first interest payment on the Discounts), and the denominator of which is the CER corresponding to the 10-day period immediately preceding December 31, 2003.  Argentina will announce any such adjustments to the outstanding principal amount of any peso-denominated Discounts and Pars at least annually by notice to the holders of such securities, as necessary, as described under “Description of the New Securities—Notices.”
   
Further Issues
New Securities governed by Argentine law do not contain provisions restricting Argentina’s ability to create and issue additional debt securities ranking pari passu with the New Securities or having the same terms and conditions as any series of the New Securities.
   
Absence of Certain Covenants or Events of Default under New Securities Governed by Argentine Law
New Securities governed by Argentine law will be issued under an Argentine government decree that will not contain certain covenants granted to holders of New Securities governed by New York law or English law.  Argentina will have no obligation with respect to New Securities governed by Argentine law to pay additional amounts for any withholding of Argentine taxes, duties or assessments on payments of principal, interest or other amounts on such New Securities.  Nor will New Securities governed by Argentine law include certain of the covenants set forth in the accompanying prospectus, such as the negative pledge or pari passu clause, or contain events of default.

     

 
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 The Discounts
 
Securities Offered
Discount Bonds due December 31, 2033.
   
Principal Payments
Argentina will repay the principal of the Discounts in twenty equal semi-annual payments on June 30 and December 31 of each year, commencing on June 30, 2024, except that in the case of peso-denominated Discounts, payment amounts will be adjusted for inflation based on the CER.  The twenty equal semi-annual payments will include the capitalized amounts accrued prior to the first amortization date.  Annex B to this document contains a schedule for principal payments on U.S. dollar-denominated Discounts.
   
Interest
The Discounts will bear interest, payable semi-annually in arrears (except as described below) and computed on the basis of a 360-day year of twelve 30-day months, accruing from and including December 31, 2009, to but excluding December 31, 2033, at a rate per annum as follows:
 
 
Currency Denomination
 
Annual Interest Rate
 
 
U.S. dollars
 
8.28%
 
 
Euro
 
7.82%
 
 
Pesos
 
5.83%
 
         
  Part of the interest accrued prior to December 31, 2013, will be paid in cash and part will be capitalized.  This means that on the relevant payment date the portion of interest that is capitalized is not paid in cash but is instead added to the principal amount of your Discounts, and future calculations of interest are based on this adjusted principal amount. The table below sets forth the annual rates of interest on the Discounts, broken down to reflect the portion that will be paid in cash and the portion that will be capitalized:
   
Currency
 
 
      U.S. dollars  
Euro
   
Pesos
 
 
From and including
 
To but excluding
 
Cash
   
Capitalized
   
Cash
   
Capitalized
   
Cash
   
Capitalized
 
December 31, 2009
December 31, 2013
    5.77 %     2.51 %     5.45 %     2.37 %     4.06 %     1.77 %
December 31, 2013
December 31, 2033
    8.28 %     0.00 %     7.82 %     0.00 %     5.83 %     0.00 %
                                                   
  Interest payment dates for the Discounts are June 30 and December 31 of each year, commencing on June 30, 2010; provided that if settlement is delayed past June 30, 2010 for any reason, interest that would be payable in cash on the first interest payment date will instead be payable on the Early Settlement Date or the Final Settlement Date, as applicable.  Interest that will be payable in cash and interest to be capitalized on the first interest payment date following the later of June 30, 2010 and the Early Settlement Date or the Final Settlement Date, as applicable, will consist of interest accrued from and including June 30, 2010, to but excluding such interest payment date.
 
 
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  Securities Codes  The Discounts will be assigned the following securities codes:
       
 
Security
ISIN
Common Code
 
U.S. dollar-denominated Discounts governed by New York law issued in exchange for Pre-2005 Eligible Securities or 2005 Pars
XS0501194756
050119475
 
U.S. dollar-denominated Discounts governed by New York law issued in exchange for 2005 Discounts(*)
XS0501195050
050119505
 
U.S. dollar-denominated Discounts governed by Argentine law
ARARGE03G68
050542661
 
Euro-denominated Discounts governed by English law issued in exchange for Pre-2005 Eligible Securities or 2005 Pars
XS0501195134
050119513
 
Euro-denominated Discounts governed by English law issued in exchange for 2005 Discounts(*)
XS0501195308
050119530
 
Peso-denominated Discounts governed by Argentine law
ARARGE03G696
050542696
 
____________________
(*)   Discounts issued in exchange for 2005 Discounts on the Early Settlement Date, if any, will not be fungible with those issued on the Final Settlement Date; therefore, if any such Discounts are issued on the Early Settlement Date, we will request and announce an additional ISIN for those to be issued on the Final Settlement Date.
 
 
 
 
 
 
 
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The 2017 Globals
 
Securities Offered
U.S. dollar-denominated 8.75% Global Bonds due 2017 (the “2017 Globals”)
   
Issue Price
The 2017 Globals Issue Price will be the issue price (expressed as a decimal) of the 2017 Globals sold in the concurrent cash offering or, if Argentina does not sell global bonds due 2017 in the concurrent cash offering and waives the Financing Condition, the price (expressed as a decimal) of the 2017 Globals resulting from the calculation by Argentina of the sum of the present values of all scheduled interest and principal payments of the 2017 Globals, discounted to the Early Settlement Date using the 2017 Globals Discount Rate.
   
Principal Repayment
Argentina will redeem the principal amount of the 2017 Globals at par on the 2017 Globals Maturity Date.  Argentina will announce the 2017 Globals Maturity Date on the Early Announcement Date.
   
Interest
8.75% per annum, payable semi-annually in arrears, and computed on the basis of a 360-day year of twelve 30-day months.
Interest on the 2017 Globals will accrue from and including the Early Settlement Date to but excluding the 2017 Globals Maturity Date, and will be payable in cash on each interest payment date.  Argentina will announce the interest payment dates on the 2017 Globals on the Early Announcement Date.  The first such interest payment date will be approximately six months after the Early Settlement Date.
   
Governing Law
The governing law of the 2017 Globals will be New York law.
   
Securities Codes
The 2017 Globals will be assigned the following securities codes:
 
   
ISIN
   
Common Code
 
           
     XS0501195480    050119548  



     

 
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The Pars
   
Securities Offered
Par Bonds due December 31, 2038.
   
Maximum Principal Amount
Argentina may issue Pars only up to U.S.$2 billion, the Par Option Maximum, or its equivalent in other currencies, pursuant to the Invitation and, if concurrent with the Invitation, the offer in Japan.  For purposes of determining whether the Par Option Maximum is reached, the principal amount of Pars to be issued in euro or pesos will be translated into U.S. dollars using the applicable FX Rate 2010.
   
Principal Payments
Argentina will repay principal in twenty equal semi-annual payments, except that in the case of peso-denominated Pars, payment amounts will be adjusted for inflation based on the CER.  Argentina will pay the first nineteen installments on March 31 and September 30 of each year, commencing on September 30, 2029, and will pay the last installment on December 31, 2038.  Annex B to this document contains a schedule for principal payments on U.S. dollar-denominated Pars.
   
Interest
The Pars will bear interest, payable semi-annually in arrears, and computed on the basis of a 360-day year of twelve 30-day months, accruing from and including September 30, 2009 to but excluding December 31, 2038, at the following annual rates:
       
Currency
 
 
From and
including
To but
excluding
 
U.S. dollars
   
Euro
   
Pesos
 
 
September 30, 2009
March 31, 2019
    2.50 %     2.26 %     1.18 %
 
March 31, 2019
March 31, 2029
    3.75 %     3.38 %     1.77 %
 
March 31, 2029
December 31, 2038
    5.25 %     4.74 %     2.48 %
                             
 
Interest payment dates for the Pars will be March 31 and September 30 of each year, and December 31, 2038.  Interest accrued on the Pars from and including September 30, 2009, to but excluding March 31, 2010, will be paid in cash on the Final Settlement Date.  The payment on the first interest payment date following the Final Settlement Date will consist of interest accrued from and including March 31, 2010, to but excluding such interest payment date.  All interest on the Pars will be paid in cash on each interest payment date.
   
Securities Codes
The Pars will be assigned the following securities codes:
 
 
Security
ISIN
Common Code
 
 
U.S. dollar-denominated Pars governed by New York law issued in exchange for Pre-2005 Eligible Securities or 2005 Discounts
XS0501195647
050119564
 
 
U.S. dollar-denominated Pars governed by New York law issued in exchange for 2005 Pars
XS0501195720
050119572
 
 
 
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U.S. dollar-denominated Pars governed by Argentine law
ARARGE03G704
050542505
 
 
Euro-denominated Pars governed by English law issued in exchange for Pre-2005 Eligible Securities or 2005 Discounts
XS0501195993
050119599
 
 
Euro-denominated Pars governed by English law issued in exchange for 2005 Pars
XS0501196025
050119602
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Peso-denominated Pars governed by Argentine law
ARARGE03G712
050542513
 

 
 
 

 
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The GDP-linked Securities
 
Securities Offered
GDP-linked Securities expiring no later than December 15, 2035.
Notional Amount
Each GDP-linked Security will have a notional amount equal to the corresponding Eligible Amount of Pre-2005 Eligible Securities tendered and accepted in the Invitation.  If the Pre-2005 Eligible Securities you tender and Argentina accepts are not in the same currency as the GDP-linked Securities you are entitled to receive, you will receive a notional amount of GDP-linked Securities equivalent to the Eligible Amount of your Pre-2005 Eligible Securities, translated into the currency in which your GDP-linked Securities are denominated using the appropriate FX Rate 2003.
There are no principal payments in respect of the GDP-linked Securities.  Holders will not receive any payments during the life or upon the expiration of their GDP-linked Securities other than as described below.
   
Payments
Any payments on the GDP-linked Securities are contingent upon the performance of Argentina’s GDP (as described below) and subject to the conditions described below.  Payments made on the GDP-linked Securities will be based on the notional amount of GDP-linked Securities that you hold.
   
Payment Currency
The payment currency of the GDP-linked Securities issued in exchange for Pre-2005 Eligible Securities will be the currency of the Discounts or Pars issued in exchange for the same Pre-2005 Eligible Securities, which may be U.S. dollars, euro or pesos.
   
Calculation Date
The calculation date for the GDP-linked Securities will be on November 1 of each year following the relevant reference year (as defined below), commencing on November 1, 2006.
   
Payment Date
Subject to the conditions specified below, Argentina will make payments on the GDP-linked Securities on December 15 of each year following the relevant reference year.  The first payment on the GDP-linked Securities will be deemed to have occurred on December 15, 2006, and holders receiving GDP-linked Securities pursuant to the Invitation will be deemed to have received, and will waive actual receipt of, all payments on the GDP-linked Securities that would have been made during the period from and including June 2, 2005 to but excluding December 31, 2009 (including the payment made on December 15, 2009), as if the GDP-linked Securities were outstanding during that period.  The first payment, if any, that will be made in cash on the GDP-linked Securities issued pursuant to the Invitation will, therefore, occur on December 15, 2010.
Holders of Pre-2005 Eligible Securities will not receive any payment or any other consideration in respect of the payments deemed made during the period from and including June 2, 2005 to but excluding December 31, 2009 on the GDP-linked Securities.
   
Reference Year
The reference year for the GDP-linked Securities will be a calendar year, commencing in 2005 and ending in 2034.
   
Base Case GDP
The base case gross domestic product (“Base Case GDP”) for each reference year, commencing with the 2009 reference year, is set forth in the following chart:
 
 
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Reference Year
Base Case
GDP (1993
pesos in
millions)
Base Case
Growth
Rate (%)
Reference
Year
Base Case
GDP (1993
pesos in
millions)
Base Case
Growth
Rate (%)
 
 
2009
327,968.83
3.29%
2022
486,481.92
3.00%
 
 
2010
338,675.94
3.26%
2023
501,076.38
3.00%
 
 
2011
349,720.39
3.26%
2024
516,108.67
3.00%
 
 
2012
361,124.97
3.26%
2025
531,591.93
3.00%
 
 
2013
372,753.73
3.22%
2026
547,539.69
3.00%
 
 
2014
384,033.32
3.03%
2027
563,965.88
3.00%
 
 
2015
395,554.32
3.00%
2028
580,884.85
3.00%
 
 
2016
407,420.95
3.00%
2029
598,311.40
3.00%
 
 
2017
419,643.58
3.00%
2030
616,260.74
3.00%
 
 
2018
432,232.88
3.00%
2031
634,748.56
3.00%
 
 
2019
445,199.87
3.00%
2032
653,791.02
3.00%
 
 
2020
458,555.87
3.00%
2033
673,404.75
3.00%
 
 
2021
472,312.54
3.00%
2034
693,606.89
3.00%
 
               
  The Base Case GDP will be adjusted in accordance with any changes to the year of base prices (currently 1993).
   
  Actual Real GDP
The actual real gross domestic product (“Actual Real GDP”) is the gross domestic product of Argentina in constant pesos for each calendar year as published by the Instituto Nacional de Estadística y Censos (“INDEC”).
   
 
Actual Real GDP is currently calculated by INDEC using the year 1993 as the year of base prices.  If in any year, the year of base prices for calculating Actual Real GDP is changed by INDEC, the Base Case GDP will be adjusted accordingly.  For example, if the year of base prices is changed to 2008 and Actual Real GDP for 2010 with 1993 prices is X, and with 2008 prices is Y, then the Base Case GDP for 2010 = Base Case GDP as per the chart above multiplied by a fraction, the numerator of which is Y and the denominator of which is X.
   
  Actual Nominal GDP
The actual nominal gross domestic product (“Actual Nominal GDP”) is the gross domestic product of Argentina in current pesos for each calendar year as published by the INDEC.
   
  Payment Conditions
Argentina will make a payment on GDP-linked Securities in respect of any given reference year only if the following three conditions are met:
   
     for the reference year, Actual Real GDP exceeds Base Case GDP;
     
   ●  for the reference year, annual growth in Actual Real GDP exceeds the growth rate in Base Case GDP for such year (for your reference, the Base Case GDP for 2008 is Ps. 317,520.47 million, measured in 1993 pesos); and
     
   ●
total payments made on a GDP-linked Security do not exceed the payment cap for that GDP-linked Security.
     
 
Annual growth of “Actual Real GDP” for any reference year will be calculated by dividing Actual Real GDP for that reference year by the Actual Real GDP for the year preceding that reference year, minus one.  For purposes of this calculation, the Actual Real GDP for the relevant reference year and the preceding year will each be measured using the same year of base prices, with Actual Real GDP for the year preceding the reference year adjusted, if necessary, to reflect any changes in the year of base prices implemented during such reference year (for an example of how this adjustment is effected see “—Actual Real GDP” above).
 
 
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  Excess GDP
The excess gross domestic product for any reference year (“Excess GDP”) is the amount, if any, by which Actual Real GDP (converted to nominal pesos, as described below) exceeds the Base Case GDP (converted to nominal pesos, as described below).  Excess GDP will be expressed in billions.
 
For purposes of determining Excess GDP for any reference year, each of the Actual Real GDP and Base Case GDP for that reference year will be converted into nominal pesos by multiplying it by a fraction, the numerator of which is the GDP Deflator (as defined below) for that reference year and the denominator of which is the GDP Deflator for the year of base prices used to calculate Actual Real GDP and Base Case GDP for that reference year.  As noted above, 1993 is currently the year of base prices, and the GDP Deflator for that year is one.
   
  GDP Deflator
The GDP deflator for any given year (“GDP Deflator”) is the quotient that results from dividing the Actual Nominal GDP for such year, by the Actual Real GDP for the same year, in each case as published by INDEC.
   
  Payment Amount
On each payment date, holders of GDP-linked Securities will be entitled to receive payments in an amount equal to the Available Excess GDP (as defined below) for the corresponding reference year, multiplied by the aggregate notional amount of GDP-linked Securities they hold.  “Available Excess GDP” is an amount per unit of currency of notional amount of GDP-linked Securities, determined in accordance with the following formula:
   
 
Available Excess GDP = (0.05 x Excess GDP) x unit of currency coefficient
 
where:
   
     “Excess GDP” is expressed in billions of nominal pesos, and
     
   
the “unit of currency coefficient” is as set forth in the following table:
   
   
 
Currency
of GDP-linked Security
Unit of
Currency Coefficient
 
 
U.S. dollars                            
1/81.8 = 0.012225
 
 
Euros                            
1/81.8 x (1/0.7945)  = 0.015387
 
 
Pesos                            
1/81.8 x (1/2.91750)  = 0.004190
 
       
    The unit of currency coefficient represents the proportion that one GDP-linked Security with a notional amount of one unit of currency bears to the aggregate Eligible Amount of all Eligible Securities outstanding as of January 10, 2005, the date on which Argentina commenced its 2005 exchange offer (approximately U.S.$81.8 billion), calculated using currency exchange rates in effect on December 31, 2003.
 
 
 
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For purposes of effecting payments on GDP-linked Securities, Available Excess GDP will be converted to the relevant payment currency using the average free market exchange rate of pesos to the applicable payment currency during the 15 calendar days preceding December 31 of the relevant reference year.
   
   All calculations of payments on the GDP-linked Securities will be performed by the Ministry of Economy and Public Finance of Argentina.
   
 
Annex G to this document contains sample calculations related to payments on GDP-linked Securities.
   
  Payment Cap
The total amount to be paid during the life of the GDP-linked Securities (including payments deemed to have been made by Argentina during the period from June 2, 2005 to but excluding December 31, 2009), per unit of GDP-linked Security, will not exceed 0.48, measured per unit of currency.  We refer to this amount as the “payment cap for GDP-linked Securities.”  For example, if you were to receive GDP-linked Securities in a notional amount equal to U.S.$1 million, the payment cap for your GDP-linked Securities would equal U.S.$480,000.  See “Description of the New Securities—General Terms of the GDP-linked Securities” for details on the amount of payments made on 2005 GDP-linked Securities to but excluding December 31, 2009.
The amount of the payment cap for the GDP-linked Securities remaining available as of December 31, 2009 (which we refer to as the “remaining payment cap”) is as follows:
     
   
0.4060871, for U.S. dollar-denominated GDP-linked Securities;
     
   ●
0.4125113, for euro-denominated GDP-linked Securities; and
     
   ●
0.3979293, for peso-denominated GDP-linked Securities.
     
 
The remaining payment cap represents the maximum amount of the cash payments that Argentina may be required to make under the GDP-linked Securities issued pursuant to the Invitation.
   
 
If the payment cap for a GDP-linked Security is reached in a payment year prior to the scheduled expiration of the GDP-linked Securities, the GDP-linked Securities will be deemed to have expired in such year.
   
 
If for any given year the aggregate payment due under a GDP-linked Security is greater than the amount remaining under the payment cap for that Security, then the remaining amount available under the payment cap for that GDP-linked Security will be payable to the holder of that security.
   
  Governing Law
The governing law of each GDP-linked Security issued in exchange for Pre-2005 Eligible Securities will be the same as the governing law of the Discounts or Pars issued in exchange for the same Pre-2005 Eligible Security.
 
 
 
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Securities Codes
The GDP-linked Securities issued pursuant to the Invitation will have the following securities codes:
 
 
Security
ISIN
Common Code
 
 
U.S. dollar-denominated GDP-linked Securities governed by New York law
XS0501197262
050119726
 
 
U.S. dollar-denominated GDP-linked Securities governed by Argentine law
ARARGE03E154
020978961
 
 
Euro-denominated GDP-linked Securities
XS0209139244
020913924
 
 
Peso-denominated GDP-linked Securities
ARARGE03E147
020979194
 
 
 
 
 
 
 
 
 
 
 
 

     

 
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RISK FACTORS
 
Your decision to tender or not to tender Eligible Securities in exchange for New Securities involves risk.  We urge you to read carefully this document and the accompanying prospectus in their entirety and to note, in particular, the following risk factors, as well as those risk factors set forth in the accompanying prospectus beginning on page 7.
 
Risk Factors Relating to the Invitation
 
Risks of Not Participating in the Invitation
 
Eligible Securities that are in default and that are not tendered may remain in default indefinitely and, if you elect to litigate, Argentina intends to oppose such attempts to collect on its defaulted debt.
 
Eligible Securities in default that are not exchanged pursuant to the Invitation may remain in default indefinitely.  In light of its financial and legal constraints, Argentina does not expect to resume payments on any Eligible Securities in default that remain outstanding following the expiration of the Invitation.  Argentina has opposed vigorously, and intends to continue to oppose, attempts by holders who did not participate in its prior exchange offers to collect on its defaulted debt through administrative, litigation, arbitral and other legal proceedings against Argentina.  Argentina remains subject to significant legal constraints regarding its defaulted debt.  On February 9, 2005, the Argentine Congress passed the Lock Law, which precluded Argentina from re-opening the 2005 exchange offer or otherwise paying any claims or judgments based on non-tendered securities eligible to participate in the 2005 exchange offer.  On November 18, 2009, Congress passed Law No. 26,547, which temporarily suspended the operation of Articles 2, 3 and 4 of the Lock Law to allow Argentina to launch a new debt exchange.  This limited suspension is effective until the earlier of December 31, 2010 and the date on which the Executive Branch, through the Ministry of Economy and Public Finance, announces the conclusion of the process of restructuring of Argentina’s debt securities.  Law No. 26,547 precludes Argentina from offering any person or entity terms equal to or better than those offered under the 2005 exchange offer or from offering any person or entity that has brought a claim based on non-tendered securities terms better than those offered to a person or entity that has not brought such a claim.
 
Consequently, if you elect not to tender your Eligible Securities in default pursuant to the Invitation there can be no assurance that you will receive any future payments or be able to collect through litigation in respect of your Eligible Securities in default.
 
If the Invitation is completed, the trading market for any series of Eligible Securities not exchanged may become illiquid, which may adversely affect the market value of any Eligible Securities of such series and the ability of holders to sell Eligible Securities.
 
All Eligible Securities tendered and accepted pursuant to the Invitation will be cancelled.  The exchange of Eligible Securities of any series pursuant to the Invitation and the cancellation of such Eligible Securities will reduce the aggregate principal amount of Eligible Securities of the applicable series that otherwise might trade in the market.  This could adversely affect the liquidity and market value of any Eligible Securities of that series not exchanged pursuant to the Invitation.  We expect that the liquidity of Pre-2005 Eligible Securities will be disproportionately adversely affected by the Invitation.  Shortly before the commencement of the Invitation, there was not a liquid market for most or all series of Pre-2005 Eligible Securities, and we expect that this illiquidity will worsen once the tendered Pre-2005 Eligible Securities are cancelled.  As a result, if you elect not to participate in the Invitation, it may become more difficult for you to trade your Eligible Securities and the market value of your Eligible Securities may be adversely affected, with those adverse effects being greatest if you hold Pre-2005 Eligible Securities.
 
Risks of Participating in the Invitation
 
Holders should understand the schedule and terms of the Invitation before tendering any Eligible Securities.  In particular, holders should be aware that the terms of the Invitation allow Argentina to terminate or extend the Invitation, to withdraw or amend the Invitation in one or more jurisdictions, and to reject valid tenders of Eligible Securities, in each case at Argentina’s sole discretion.  Holders should also be aware that once they tender Eligible Securities pursuant to the Invitation, they will not be able to withdraw such tenders except under certain limited circumstances.
 
 
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The terms of the Invitation allow Argentina, in its sole discretion and to the fullest extent permitted by applicable laws, to extend or terminate the Invitation, to withdraw or amend the Invitation in one or more jurisdictions, and to reject valid tenders of Eligible Securities even following the Early Announcement Date or the Final Announcement Date, as applicable, in certain circumstances.  Announcements in connection with the Invitation (including announcements with respect to the termination, extension, withdrawal or amendment of the Invitation) will be displayed on the Invitation Website, on the website of the Luxembourg Stock Exchange (http://www.bourse.lu) and, to the extent provided in this document, issued by press release to the news services. Accordingly, there can be no assurance that the exchange of Eligible Securities for New Securities pursuant to the Invitation will be completed in any particular jurisdiction or at all.  Even if the exchange is consummated, there can be no assurance that it will be completed in accordance with the schedule and terms set forth in this document.
 
Argentina reserves the right to extend or delay the Early Settlement Date or the Final Settlement Date, to terminate the Invitation after the Early Announcement Date or the Final Announcement Date or to modify the settlement procedures in any way if:
 
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any court order or judgment is issued, or any legal proceedings are commenced with the purpose of preventing the cancellation of the Eligible Securities tendered, attaching payments to Argentina in connection with Argentina’s concurrent cash offering, attaching or enjoining the New Securities, impeding or attaching the cash payments pursuant to the Invitation or payments under the New Securities, preventing the release of claims, including any administrative, litigation or arbitral claims, preventing the termination of pending administrative, litigation, arbitral or other legal proceedings against Argentina in respect of the tendered Eligible Securities, preventing the satisfaction of any payment order, judgment, arbitral award or other such order against Argentina in respect of the tendered Eligible Securities, or otherwise having the effect of frustrating the purposes of the Invitation; or
 
·  
Argentina, in its sole discretion and to the extent permitted by applicable laws, rules and regulations, determines that such extension, delay, termination or modification is in the best interests of Argentina or the holders of Eligible Securities seeking to participate in the Invitation, in light of any court order, judgment or pending administrative, litigation, arbitral or other legal proceedings.
 
Tendering holders will not be able to withdraw their tenders (except in limited circumstances) or effect any transfer of any tendered Eligible Securities.  Eligible Securities that you tender and Argentina accepts in the Invitation will be “blocked” for transfers to third parties pending completion of the Invitation.  The market price of the Eligible Securities may fluctuate after tendering holders tender Eligible Securities pursuant to the Invitation but tendering holders will be unable to benefit from favorable fluctuations because they will be unable to trade such securities.
 
Tendering holders will not receive any New Securities or the cash payments, if applicable, in exchange for Eligible Securities they tender until the Early Settlement Date or the Final Settlement Date, as applicable.  The time between the Early Tender Deadline and the Early Settlement Date and between the Expiration Date and the Final Settlement Date, as applicable, will be at least 21 and 56 calendar days, respectively, and could be significantly longer.  If completion of the Invitation is delayed, tendering holders may have to wait longer than expected to receive any New Securities or the cash payments, if applicable.
 
The Invitation is subject to a cancellation condition, which may not be waived by Argentina; and cancellation of the Eligible Securities takes place prior to the issuance of the New Securities and the credit of the cash payments to the applicable holders’ accounts.
 
 
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The Invitation is conditioned on the cancellation of the Eligible Securities.  The Eligible Securities tendered by holders during the Invitation and accepted by Argentina will be cancelled on the Early Settlement Date or the Final Settlement Date, as applicable, prior to the issuance of the New Securities and the credit of the cash payments to the applicable holders’ accounts (which may take place over the course of several days).  If any court or arbitral order or administrative or legal proceeding prohibits or delays the cancellation of the tendered Eligible Securities, Argentina will postpone either or both of the Early Settlement Date or the Final Settlement Date, as applicable, until the Eligible Securities can be cancelled or, if in its judgment, cancellation cannot be effected without unreasonable delay, it will cancel the Invitation (or, if Argentina considers that the Eligible Securities affected thereby are, in its sole judgment, immaterial, Argentina may cancel the Invitation as to the affected Eligible Securities only) and return the Eligible Securities to the tendering holders.
 
There is no established trading market for the New Securities, which will not be fungible with the 2005 Discounts or the 2005 Pars; the price at which the New Securities will trade in the secondary market is uncertain.
 
Each series of New Securities is a new issue of securities with no established trading market.  The Discounts and Pars issued in the Invitation will not be fungible with the 2005 Discounts and the 2005 Pars, respectively, although their terms will be substantially the same as the corresponding 2005 Discounts and 2005 Pars.  Moreover, it is likely that (i) Discounts issued in exchange for 2005 Discounts in the Invitation will not be fungible with the Discounts issued in exchange for other Eligible Securities in the Invitation and (ii) Pars issued in exchange for 2005 Pars in the Invitation will not be fungible with the Pars issued in exchange for other Eligible Securities in the Invitation.  Although Argentina has been advised by the international joint dealer managers that they intend to make a market in the New Securities, they are under no obligation to do so and may discontinue market-making at any time without notice.  Consequently, we cannot assure you that a market for any series of the New Securities will develop, or if one does develop, that it will continue for any period of time.  If an active market for any series of the New Securities fails to develop or continue, this failure could make it more difficult to sell your New Securities and could harm the trading price of the New Securities.  Argentina has submitted an application to list each series of New Securities on the Luxembourg Stock Exchange and to have the New Securities admitted to trading on the Euro MTF market of the Luxembourg Stock Exchange, and will apply to list each series of the New Securities on the Buenos Aires Stock Exchange and to have the New Securities admitted to trading on the Mercado Abierto Electrónico.  Nevertheless, we can offer no assurance that any such application, if made, will be approved before the Early Settlement Date, the Final Settlement Date or at all.
 
You should be aware that the Pars and Discounts issued in the Invitation will have longer maturities and, generally, lower interest rates as compared to the Pre-2005 Eligible Securities, and that you will no longer be entitled to interest accrued after December 31, 2001 on the Pre-2005 Eligible Securities; you should weigh these considerations against the risk of not participating in the Invitation, as described above.
 
Your decision to tender your Eligible Securities should be made with the understanding that you will receive securities discounted from the original value of your Eligible Securities.  If you tender Pre-2005 Eligible Securities and elect or are allocated the Discount Option, you will receive a principal amount of Discounts equal or equivalent to 33.7% of the Eligible Amount of the Eligible Securities you tender.  Based on the trading prices of the 2005 Discounts (which have equivalent economic terms to the Discounts) during certain periods of 2009, it is possible that the Discounts you receive will trade at a discount to their principal amount.  If you elect or are allocated the Par Option, you will receive a principal amount of Pars equal or equivalent to the Eligible Amount of the Eligible Securities you tender.  Based on the trading prices of the 2005 Pars (which have equivalent economic terms to the Pars) during 2009, it is likely that the Pars you receive will trade at a discount to their principal amount and that the trading price of the Pars from time to time will be lower than the trading price of the Discounts.  Moreover, the interest rates of Discounts and Pars may be lower than the interest rates applicable to your Pre-2005 Eligible Securities and you will no longer be entitled to interest accrued on your tendered Pre-2005 Eligible Securities after December 31, 2001.  The longer maturity of the New Securities as compared to the Pre-2005 Eligible Securities exposes you to Argentina sovereign risk for a longer period of time.  In addition, the fixed rates of interest and longer maturities of these securities expose you to interest rate risk over a longer period of time.  That is, if interest rates rise generally, the price of your New Securities will fall, while if interest rates fall generally, the price of your New Securities will rise.  You should weigh these considerations against the risks of not participating in the Invitation described above.

 
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Certain terms of the Invitation and the New Securities have not yet been announced, and as a result, you may not be able to calculate the Total Consideration or Consideration to be received pursuant to the Invitation prior to the time that you make your decision of whether to participate in the Invitation.

You may not be able to determine some or all of the FX Rate 2010 for each relevant currency, the 2005 Discounts Trading Price, the 2005 Pars Trading Price, the 2017 Globals Issue Price, 2017 Globals Maturity Date and the interest payment dates for the 2017 Globals prior to the time that you make your decision whether to participate in the Invitation.  These variables will be announced on the FX Determination Date, the Early Announcement Date or the Final Announcement Date, as described under “Summary—Summary Time Schedule for the Invitation.”

Argentina will announce the definitive calculation of the Total Consideration and Consideration deliverable upon the exchange of Pre-2005 Eligible Securities or 2005 Eligible Securities under the Discount Option on the Early Announcement Date and the definitive calculation of the Total Consideration deliverable upon the exchange of Pre-2005 Eligible Securities or 2005 Eligible Securities under the Par Option on the Final Announcement Date, as described under “Summary—Summary Time Schedule for the Invitation.”  Holders of Eligible Securities should carefully examine the description of the consideration to be received pursuant to the Invitation before deciding whether to participate in the Invitation.
 
Participation in the Invitation may be unattractive to holders of 2005 Eligible Securities.
 
If you hold 2005 Eligible Securities, the Invitation may not be attractive to you.  Argentina is required under the terms of the 2005 Eligible Securities to offer all holders of the 2005 Eligible Securities the right to participate in the Invitation.  Holders of 2005 Eligible Securities should be aware that, although they will have the right to re-elect the Par Option, the terms of the Invitation are less favorable than the terms of Argentina’s 2005 exchange offer.  Argentina is seeking to provide comparable treatment to all holders that participate in the Invitation.  Accordingly, the consideration deliverable to tendering holders of 2005 Eligible Securities will be less favorable than the consideration in the 2005 exchange offer in the following respects:
 
·  
Holders of 2005 Discounts that participate in the Invitation and elect or are allocated the Discount Option will receive a principal amount of Discounts that is less than the principal amount of 2005 Discounts that they tender in the Invitation, and will not receive any 2017 Globals or GDP-linked Securities;
 
·  
Holders of 2005 Discounts that participate in the Invitation and elect the Par Option will be subject to the Par Option Limit per Holder and the risk of proration.  To the extent that such holders are allocated the Par Option, they will receive a principal amount of Pars that exceeds the principal amount of 2005 Discounts they tender, but those Pars will bear interest at a significantly lower interest rate than the 2005 Discounts they tender and will mature five years later than the 2005 Discounts.  The terms of each series of the New Securities are described below under the heading “Description of the New Securities.”  In addition, the principal amount of Pars they will receive will be less than the principal amount of the 2005 Pars that they would have received had they elected to receive and were allocated 2005 Pars in Argentina’s 2005 exchange offer, and they will not receive any cash payment or GDP-linked Securities;
 
·  
Holders of 2005 Pars that participate in the Invitation and elect or are allocated the Discount Option will receive a principal amount of Discounts that is less than 33.7% of the Eligible Amount of 2005 Pars that they tender in the Invitation, and will not receive any 2017 Globals or GDP-linked Securities;
 
·  
Holders of 2005 Pars that participate in the Invitation and elect and are allocated the Par Option will receive a principal amount of Pars that is less than the principal amount of 2005 Pars that they tender in the Invitation, and will not receive any cash payment or GDP-linked Securities;
 
·  
Holders of 2005 Quasi-Pars that participate in the Invitation and elect or are allocated the Discount Option will receive a principal amount of Discounts that is equal to 33.7% of the Eligible Amount of 2005 Quasi-Pars that they tender in the Invitation, and will not receive any 2017 Globals or GDP-linked Securities; and
 
 
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·  
Holders of 2005 Quasi-Pars that participate in the Invitation and elect and are allocated the Par Option will receive a principal amount of Pars that is less than the amount that they would have received had they elected to receive and were allocated 2005 Pars in Argentina’s 2005 exchange offer, and will not receive any cash payment or GDP-linked Securities.
 
Holders of 2005 Eligible Securities should consider carefully the adjustments set forth above, the tax and other consequences to them of participating in the Invitation and the other risk factors described in this section, before making a decision whether to tender any of the 2005 Eligible Securities they hold.
 
The Invitation is subject to a financing condition.  If Argentina is not able to consummate its planned concurrent cash offering, either because it is not able to raise the required funds or because holders that decline to participate in the Invitation seek to attach the proceeds of the cash offering, Argentina will not be obligated to proceed with settlement of the Invitation.
 
Argentina is, pursuant to a separate offering document, launching the concurrent cash offering.  Some hold-out creditors have indicated an intention to attempt to attach assets in connection with the Invitation, in particular any proceeds of Argentina’s concurrent cash offering.  If Argentina is not able to price the cash offering, or if hold-out creditors succeed in attaching the proceeds of the cash offering or attempt to interfere in the closing of the cash offering, Argentina may, in its sole and absolute discretion, decide to terminate the Invitation, whether or not it has previously accepted tenders on the Early Announcement Date or Final Announcement Date.  Any such termination will not affect any exchange as to which settlement has already been completed.
 
Holders of Eligible Securities who do not participate in the Invitation may attempt to challenge the progress or consummation of the Invitation or may attempt to attach assets in connection with the Invitation, in particular any proceeds of Argentina’s concurrent cash offering, which may delay or terminate the Invitation if litigation frustrates its purpose.
 
Argentina may be subject to efforts by hold-out creditors to enjoin or otherwise prevent the consummation of the Invitation or to attach assets in connection with the Invitation and Argentina may delay or terminate the Invitation if litigation frustrates its purpose.  Creditors have obtained numerous judgments against Argentina and some have sought to enforce their claims actively through attachments, injunctions and other proceedings.  Argentina cannot assure you that hold-out creditors will not take other actions that may, or that a court will not, enjoin, impede or delay the Invitation or that the Invitation may not be delayed or terminated due to creditor attachment attempts, including in connection with the concurrent cash offering or the cash payments pursuant to the Invitation.  Argentina has conditioned the Invitation on the successful completion of the concurrent cash offering.  While Argentina intends to oppose vigorously these and any other efforts to challenge the Invitation, we can offer no assurances of success and Argentina may delay or terminate the Invitation if litigation frustrates its purpose.
 
By tendering Eligible Securities pursuant to the Invitation, holders will renounce and waive significant rights and interests against Argentina, including the right to bring claims in litigation and arbitration and will be required to terminate any legal or arbitral proceedings against Argentina.
 
Holders tendering any Eligible Securities pursuant to the Invitation will, to the fullest extent permitted by applicable law, renounce and waive significant rights and interests, including the right to bring claims in connection with their tendered Eligible Securities.  Holders will also be required to agree to terminate any legal proceedings against Argentina relating to their tendered Eligible Securities, waive their right to enforce any payment order, judgment, arbitral award or other such order against Argentina obtained in any such proceedings, agree that the exchange shall be deemed to constitute full performance and satisfaction by Argentina of any payment order, judgment, arbitral award or other such order relating to the tendered Eligible Securities, and waive all rights awarded and any assets attached for their benefit through any prejudgment attachment, attachment in aid of execution, or any other measure encumbering property or any other rights of Argentina in connection with their tendered Eligible Securities.  Any holder who tenders Pre-2005 Eligible Securities belonging to any of the bond series that are the
 
 
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subject of any of the thirteen class actions certified in the United States by the District Court will forgo any right to participate as a plaintiff class member in any class action.  See “Public Sector Debt—Legal Proceedings—Litigation in the United States” in the Annual Report for more detailed information concerning certified and purported class actions currently pending before the District Court.  In addition, holders may have entered into contractual or other relationships with third parties in connection with litigation, arbitrations or other proceedings, among other things.  In such case, holders will have to consider whether and in which manner such relationships may be terminated, consistent with the terms and conditions contained herein requiring termination of legal proceedings against Argentina.  See “Terms of the Invitation—Tender Procedures—Representations, Warranties and Undertakings Relating to Tenders of Eligible Securities” for the full acknowledgments, representations, warranties and undertakings that holders will be deemed to make as a condition to their participation in the Invitation, and “Terms of the Invitation—Tender Procedures—Special Procedures for Eligible Securities Subject to Outstanding Judgments or Pending Legal or Arbitral Proceedings” for information on the special procedures, including additional documentation, that may be required if your Eligible Securities are the subject of an outstanding payment order, judgment, arbitral award or other such order against Argentina, a pending administrative, litigation, arbitral or other legal proceeding against Argentina, or are subject to a “blocking instruction” or other restriction on transfer.
 
Argentina has established certain procedures for tendering holders to effectuate and, if applicable, withdraw their tenders.  Any error committed in these procedures by a clearing system, a direct participant or a custodian, or any systemic breakdown by any clearing system, may result in the failure of a holder to tender or withdraw its Eligible Securities or a delay in a holder’s receipt of New Securities and cash payment, if applicable.
 
Any errors by the clearing systems, direct participants in the relevant clearing system and custodians may prejudice a tendering holder’s ability to receive its New Securities and cash payment, if applicable.  In order for you to receive the Total Consideration, (i) a duly completed electronic acceptance notice with respect to your tender must be received by a principal clearing system and (ii) a duly completed letter of transmittal in electronic form with respect to your tender must be submitted to the information agent through the Invitation Website, in each case no later than 5:00 P.M. (New York City time) on the Early Tender Deadline (if you are a Large Holder electing the Discount Option) or on the Expiration Date (in all other cases).  In addition, for your tender to be effective:
 
·  
the exchange agent must receive your duly completed electronic acceptance notice from the relevant clearing system within two business days after the Early Tender Deadline or three business days after the Expiration Date, as applicable;
 
·  
if you are in Germany, you must sign and submit a paper letter of transmittal to the financial institution or other intermediary through which you hold your Eligible Securities on or prior to (as such financial institution or other intermediary may direct) the Early Tender Deadline or the Expiration date, as applicable; and
 
·  
if your Eligible Securities are the subject of a pending administrative, litigation, arbitral or other legal proceeding against Argentina, are the subject of an outstanding payment order, judgment, arbitral award or other such order against Argentina, or are subject to a “blocking instruction” or other restriction on transfer, you must satisfy all special procedures, including the delivery of all required additional documentation, by the applicable deadlines.
 
Accordingly, after you contact and provide information to your custodian or other securities intermediary, you will have to rely on this institution and on the relevant direct participant and clearing system to take the steps necessary for your electronic acceptance notice and all other required documentation to be submitted properly and by the applicable deadline.  This process may include several intermediaries.  It is possible that any person or entity in this chain of tender may commit an error in submitting your tender.  Moreover, there are very large amounts of Eligible Securities outstanding and a very large number of holders of these Eligible Securities.  If a large proportion of the holders of Eligible Securities tender their Eligible Securities in the Invitation, the clearing systems or the Invitation Website may experience significant delays, and possibly systemic breakdowns, in the processing of tenders or electronic letters of transmittal by, or the delivery of New Securities and cash payments, if applicable, to holders who tender Eligible Securities.  Any such error, delay in processing or systemic breakdown could result in your electronic acceptance notice (and/or related documentation) being improperly submitted, arriving past the relevant deadline, or not at all, or the delivery of your New Securities and cash payment, if applicable, being significantly delayed.
 
 
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In the event that Argentina grants withdrawal rights (which it will only do in limited circumstances), and you wish to exercise those rights, the exchange agent must receive your duly completed notice of withdrawal and the information agent must receive your electronic notice of withdrawal via e-mail (as described under “Terms of the Invitation—Procedures for Withdrawal of Tenders”) within the allotted time.  The submission of a withdrawal notice must be effected through the same securities intermediaries, direct participants and clearing systems through which your electronic acceptance notice was delivered.  It is possible that any person or entity in this chain may commit an error in submitting your withdrawal notice, and thus prejudice your ability to withdraw your tender.
 
If you hold Eligible Securities through a financial institution or other intermediary, you must contact that financial institution or intermediary and instruct it to tender your Eligible Securities on your behalf.  You should contact that financial institution or intermediary well in advance of the Early Tender Deadline or the Expiration Date, as applicable, since that financial institution or intermediary may have earlier deadlines by which it must receive your instructions in order to have adequate time to meet the deadlines of the clearing system through which your Eligible Securities are tendered.
 
None of Argentina, the global coordinator, any international joint dealer manager, the information agent or the exchange agent will be responsible for any such errors or other failure by the clearing systems, direct participants or custodians to comply with any of these tender or withdrawal procedures.
 
You may experience delays, inconvenience and other difficulties in tendering Eligible Securities (if you hold Eligible Securities through clearing systems other than the principal clearing systems) and in holding New Securities and receiving your cash payment, if applicable (if you intend to hold New Securities and receive your cash payment, if applicable, in accounts held at clearing systems other than the principal clearing systems).
 
Argentina has made special arrangements with the principal clearing systems that will allow these clearing systems to submit electronic acceptance notices on behalf of tendering holders directly to the exchange agent.  Eligible Securities may not be tendered through DTC.  If you hold Eligible Securities through DTC or other clearing system or systems that are not authorized for tenders in the Invitation, you will have to follow special procedures in order to tender your Eligible Securities.  You are required to make yourself aware of the applicable procedures and deadlines, and you may experience delays, inconvenience or other difficulties in tendering your Eligible Securities.  Moreover, if you intend to hold New Securities and receive your cash payment, if applicable, at an account at a clearing system that is not a principal clearing system, you will have to follow special procedures in order to receive your New Securities and cash payment, if applicable, and you may experience delays, inconvenience or other difficulties in receiving your New Securities and cash payment, if applicable.
 
If you hold your Eligible Securities in a custodial account with a financial institution in Germany and you are subject to taxation in Germany on capital gains or losses from your Eligible Securities, you may suffer overwithholding of taxes in connection with the exchange of Eligible Securities into New Securities and receipt of a cash payment, if applicable.
 
Unless the German fiscal authorities confirm before the settlement that the exchange of Eligible Securities into New Securities pursuant to the Invitation does not give rise to a withholding obligation, if you hold your Eligible Securities in a custodial account with a financial institution in Germany and you are subject to taxation in Germany on capital gains or losses from your Eligible Securities, the financial institution may determine that it has to withhold tax at the statutory rate of 26.375% and, if applicable, church tax on a substitute base of 30% of your historic acquisition cost for your Eligible Securities because it cannot determine the relevant gain or loss actually derived by you from the exchange. In this case, the amount withheld may significantly exceed the tax due on your gain actually derived from the exchange and tax may even have to be withheld although you incur a loss on the exchange. If you do not receive a cash payment in consideration for your Eligible Securities or such cash payment does not cover the withholding tax, the financial institution may ask you to provide the funds necessary in order to remit the withholding tax or (under certain circumstances) may pay the withholding tax from your cash account or sell securities from your custodial account to the extent such sale is required to fund the withholding tax liability. To obtain a refund of amounts overwithheld, you would have to declare the income derived from the exchange in your
 
 
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annual income tax declaration and present a certificate of withholding tax issued by the financial institution. Refunds would only be paid after the annual income tax assessment. However, if you hold the Eligible Securities as business assets, you may be able to avoid such German withholding tax treatment.  See “Taxation—Germany—Taxation of the Exchange of Eligible Securities for New Securities—German Holders—Eligible Securities Held as Private Assets of a German Holder” for a further description of the German tax consequences of the exchange of Eligible Securities into New Securities pursuant to the Invitation.
 
Risk Factors Relating to the New Securities
 
Holders should understand that the New Securities denominated in a currency other than the currency of their home country are not an appropriate investment for them if they do not have experience with foreign currency transactions.  In particular, holders should be aware that if the specified currency of a New Security depreciates against their home country currency, the effective yield of the New Security would decrease below its interest rate and could result in a loss to them.

Rates of exchange between your home country currency and the specified currency may change significantly, resulting in a reduced yield or loss to you on the New Securities.  In recent years, rates of exchange between certain currencies have been highly volatile, and you should expect this volatility to continue in the future.

Fluctuations in any particular exchange rate that have occurred in the past, however, do not necessarily indicate future fluctuations relative to your home country currency.  National governments rarely voluntarily allow their currencies to float freely in response to economic forces.  Sovereign governments may use a variety of techniques, such as intervention by a country’s central bank or imposition of regulatory controls or taxes, to affect the rate of exchange of their currencies.  Governments may also issue a new currency to replace an existing currency or alter the exchange rate by devaluation or revaluation of a currency.  A special risk to you in participating in the Invitation is that these types of governmental actions could affect the yield of New Securities denominated in a currency other than your home country currency.

You should consult financial and legal advisors in your home country to discuss matters that may affect your participation in the Invitation and holding of, or receipt of payments on, the New Securities.
 
Risks Relating to GDP-linked Securities
 
Holders of Pre-2005 Eligible Securities should be aware of the terms of the GDP-linked Securities and that payments on GDP-linked Securities depend upon unpredictable factors so that historical GDP performance may not be indicative of future performance or payments.
 
There are no principal payments on the GDP-linked Securities, and all payments on the GDP-linked Securities are linked to the performance of Argentina’s gross domestic product (as described under “Description of the New Securities—General Terms of the GDP-linked Securities”).  In order for any payments to be made on the GDP-linked Securities, certain benchmarks must be reached.  In particular, for payments to be made in any given year, Argentina’s actual real gross domestic product for that year must exceed a specified amount and annual growth rate.  Because the historical performance of Argentina’s gross domestic product may not be indicative of future performance, you cannot be certain that these conditions for payment will be met every year, or at all.  In addition, total payments over the life of the GDP-linked Securities may not exceed the payment cap for the GDP-linked Securities (and, subsequent to settlement of the Invitation, if you tender Pre-2005 Eligible Securities, you will be deemed to have received all payments made to date for purposes of the payment cap) and the GDP-linked Securities will be deemed to have expired in any year in which the payment cap for GDP-linked Securities is reached (as described under “Description of New Securities—General Terms of the GDP-linked Securities”).  Furthermore, any difference in the calculation or compilation of Argentina’s official financial and economic data and statistics, particularly the gross domestic product, may affect your evaluation of the value of, or return on, the GDP-linked Securities.  Certain financial, economic and other information may subsequently be materially revised to reflect new or more accurate data as a result of the periodic review by the Central Bank and other Government entities and Argentina will not be required to make an adjustment to the amounts previously paid to holders of the GDP-linked Securities for subsequent changes in the calculation of Argentina’s gross domestic product.
 
 
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Certain circumstances may harm the market value of GDP-linked securities.
 
While the amounts payable under the GDP-linked Securities are based in part on the performance of Argentina’s GDP, the amounts, if any, payable in any year will also depend on a number of other factors.  Therefore, it will be difficult or impossible for the market to predict accurately the future stream of payments on these securities and as a result, the GDP-linked Securities may trade at prices considerably less than the value of this future stream of payments, and changes in the level of Argentina’s GDP may not result in a comparable change in the market value of the GDP-linked Securities.  Because payments under the GDP-linked Securities are calculated in pesos, even if these payments must be made in other currencies, holders of GDP-linked Securities denominated in such other currencies may face currency conversion risks.  Because of these factors, it may be difficult to trade GDP-linked Securities and their market value may be adversely affected.
 
Risks Relating to New Securities Governed by Argentine Law
 
New Securities governed by Argentine law will not have the benefit of certain covenants granted to holders of New Securities governed by New York law or English law.
 
Discounts, Pars and GDP-linked Securities governed by Argentine law will be issued under an Argentine government decree that will not contain certain covenants granted to holders of New Securities governed by New York law or English law.  In particular, Argentina will have no obligation with respect to Discounts, Pars and GDP-linked Securities governed by Argentine law to pay additional amounts for any withholding of Argentine taxes, duties or assessments on payments of principal or interest on such Discounts or Pars or on payments on such GDP-linked Securities.  Nor will Discounts, Pars and GDP-linked Securities governed by Argentine law include certain covenants set forth in the accompanying prospectus, such as the negative pledge covenant, or events of default.  As a result of this absence of covenants and events of default, the trading price of Discounts, Pars and GDP-linked Securities governed by Argentine law may be adversely affected and may be lower than the trading prices of Discounts, Pars and GDP-linked Securities governed by New York law or English law.
 

     

 
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RECENT DEVELOPMENTS
 
The information included in this section supplements the information about Argentina corresponding to the headings below that is contained in Exhibit D to Argentina’s Annual Report.  To the extent that the information included in this section differs from the information set forth in the Annual Report, you should rely on the information in this section.  Capitalized terms used but not defined herein shall have the meanings set forth in the Annual Report.
 
Foreign Trade and Balance of Payments
 
China
 
Recently, Argentina and China have sustained differences in relation to technical standards applicable to exports of soy crude oil from Argentina to China.  Argentina’s total exports to China in 2009 were U.S.$4.0 billion, of which soy-oil (crude and refined soy-oil) represented approximately 36.2%.  In 2009, exports of soy-oil to China represented approximately 2.6% of Argentina’s total exports, which amounted to U.S.$55.8 billion.  Both countries are in negotiations regarding this issue and are seeking to resolve it.
 
Monetary System
 
On April 13, 2010, the Chamber of Deputies rejected the emergency decree that created the Debt Repayment Fund.  A decision by the Senate is pending.
 
On April 14, 2010 the Senate approved Ms. Marcó del Pont’s appointment as Governor of the Central Bank.
 
Public Sector Debt
 
Intra-Public Sector Financings
 
In the first quarter of 2010, Argentina issued the following intra-public sector debt:
 
·  
Bonar X in an aggregate amount equal to U.S.$911 million with an annual interest rate of 7% and maturing in 2017;
 
·  
Peso-denominated Treasury notes in an aggregate amount equal to U.S.$221 million with an annual interest rate ranging from 13.36% to 13.43% and maturing in 2011; and
 
·  
Peso-denominated temporary advances from the Central Bank in an aggregate amount equal to U.S.$2.5 billion with a zero coupon interest rate and maturing one year after the date of each issuance.

 
 

­
   

 
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TERMS OF THE INVITATION
 
Argentina is inviting owners of Eligible Securities, also referred to as “holders,” to submit offers to tender, on the terms and subject to the conditions of this document, the accompanying prospectus and the related electronic acceptance notices, Eligible Securities in exchange for newly issued New Securities.  The terms of each series of the New Securities are described below under the heading “Description of the New Securities.”
 
To satisfy Argentina’s obligations under the “Rights Upon Future Offers” provisions in the Eligible Securities issued by Argentina in its 2005 exchange offer, we are offering holders of our 2005 Eligible Securities the right to participate in the Invitation, subject to the overall terms and objectives of the Invitation as set out herein.
 
 Purpose of the Invitation
 
To restructure and cancel defaulted debt obligations of Argentina represented by Pre-2005 Eligible Securities, to release Argentina from any related claims, including any administrative, litigation or arbitral claims and to terminate legal proceedings against Argentina in respect of the tendered Eligible Securities in consideration for the issuance of New Securities and, in certain cases, a cash payment.  If your tendered Eligible Securities are the subject of a pending administrative, litigation, arbitral or other legal proceeding against Argentina or you have obtained, or obtain in the future, a payment order, judgment, arbitral award or other such order against Argentina in respect of your tendered Eligible Securities, then as a condition to your participation in the Invitation, you will be required to agree to terminate any legal proceeding against Argentina in respect of your tendered Eligible Securities, release Argentina from all claims, including any administrative, litigation or arbitral claims, and take extra steps and procedures in order to participate in the Invitation, as discussed under “Terms of the Invitation—Tender Procedures—Special Procedures for Eligible Securities Subject to Outstanding Judgments or Pending Legal or Arbitral Proceedings.”  The exchange will constitute full performance and satisfaction by Argentina of any payment order, judgment, arbitral award or other such order you have obtained, or may obtain in the future, against Argentina in respect of your tendered Eligible Securities.
 
 Eligible Amounts
 
As discussed below, the principal amount of New Securities that you receive pursuant to the Invitation will depend in part on the Eligible Amount of Eligible Securities you tender.  Your Eligible Amount will differ depending on whether you tender Pre-2005 Eligible Securities or 2005 Eligible Securities.
 
You may determine the Eligible Amount of the Eligible Securities that you hold of each series by multiplying the original principal amount of such Eligible Securities by the relevant percentage under the heading “Eligible Amount as a percentage of original principal amount,” as set forth in the tables in Annexes C-1 and C-2.
 
Eligible Amount of Pre-2005 Eligible Securities
 
For purposes of the Invitation, your Eligible Securities will be assigned an “Eligible Amount,” which in the case of Pre-2005 Eligible Securities will be equal to (i) their outstanding principal amount as of December 31, 2001, plus (ii) any accrued but unpaid interest on your Eligible Securities up to but excluding December 31, 2001.  The Eligible Amount of all outstanding Pre-2005 Eligible Securities as of the date of this document is approximately U.S.$18.3 billion, comprising U.S.$17.6 billion of principal and U.S.$0.7 billion of accrued but unpaid interest as of December 31, 2001, based on currency exchange rates in effect on December 31, 2003.
 
Eligible Amount of 2005 Eligible Securities
 
For purposes of the Invitation, the “Eligible Amount” of your 2005 Eligible Securities will be equal to:
 
●  
In the case of 2005 Discounts, the quotient of (x) the original principal amount of such 2005 Discounts divided by (y) 0.337;
 
●  
In the case of 2005 Pars, the original principal amount of such 2005 Pars; and

 
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● 
In the case of 2005 Quasi-Pars, the quotient of (x) the original principal amount of such 2005 Quasi-Pars divided by (y) 0.699.

For purposes of these calculations, the “original principal amount” of any 2005 Eligible Securities means their principal amount as of December 31, 2003, without adjustment for any interest capitalized on, or any CER adjustments to the principal amount of, those 2005 Eligible Securities on or after that date.
 
The Eligible Amount of all outstanding 2005 Eligible Securities as of the date of this document is approximately U.S.$55.7 billion, based on currency exchange rates in effect on December 31, 2003.
 
 Options
 
 Subject to the terms and conditions of the Invitation described in this document, you may elect either the “Discount Option” or the “Par Option” in exchange for any Eligible Securities that you tender that are accepted by Argentina.  In the circumstances discussed under “—Limitation on Issuance of Pars” and “—Allocation of the Par Option,” you may be allocated the Discount Option even if you have elected to receive the Par Option.  We summarize certain key differences between the Discount Option and the Par Option below.
 
 Holders of Pre-2005 Eligible Securities that elect the Discount Option will receive a principal amount of Discounts equal to 33.7% of the Eligible Amount of the Eligible Securities they tender, whereas holders electing (and to the extent they are allocated) the Par Option will receive Pars in a principal amount equal to 100% of the Eligible Amount of their tendered Eligible Securities, adjusted, if the tendered Eligible Securities are denominated in a currency different from the Discounts or Pars received, by the applicable FX Rate 2003.  The Discounts mature in 2033, five years earlier than the final maturity of the Pars (2038).  The Discounts accrue interest at a higher rate than the Pars, although a portion of this interest is capitalized until December 31, 2013.  Holders of Pre-2005 Eligible Securities electing the Discount Option will receive, in payment of the interest that would have accrued and been payable in cash on the Discounts with respect to the period from December 31, 2003 to but excluding December 31, 2009 if the Discounts had been issued as of December 31, 2003, U.S. dollar-denominated 2017 Globals as part of their Total Consideration or Consideration, whereas holders of Pre-2005 Eligible Securities who elect and are allocated the Par Option will receive on the Final Settlement Date a cash payment in the currency in which the Pars they receive are denominated, in payment of the interest that would have accrued on the Pars with respect to the period from December 31, 2003 to but excluding September 30, 2009 if the Pars had been issued as of December 31, 2003.  The principal amount of 2017 Globals to be issued in the Discount Option will be greater than the cash payment in the Par Option with respect to the same Eligible Amount of Eligible Securities because of the interest rate differential between the Discounts and the Pars during the interest accrual periods referred to above, but the 2017 Globals will mature only after seven years, whereas the cash payment in the Par Option will be made on the Final Settlement Date.  Holders of Pre-2005 Eligible Securities will receive the same notional amount of GDP-linked Securities, regardless of whether they elect or are allocated the Discount Option or the Par Option.
 
 You may elect the Par Option for up to U.S.$50,000, €40,000, ₤30,000, Sfr.60,000, ¥5,000,000 or Ps. 150,000, as the case may be, in outstanding principal amount of each series of Pre-2005 Eligible Securities, or in Eligible Amount of each series of 2005 Eligible Securities, that you hold but not more.  We call this limit the “Par Option Limit per Holder.”  If your tender exceeds the Par Option Limit per Holder, your election of the Par Option will be invalid with respect to such excess, and you will be deemed to have elected the Discount Option with respect to such excess.  If a direct participant tenders Eligible Securities on behalf of more than one beneficial owner in the same electronic acceptance notice, and each such beneficial owner is separately identified in one or more letters of transmittal in electronic form submitted to the information agent by the underlying financial intermediaries, the Par Option Limit per Holder will be applied separately for each beneficial owner tendering Eligible Securities.  Argentina and the information agent have agreed that they will maintain the confidentiality of the information contained in the letter(s) of transmittal relating to the identity of the beneficial owners and any administrative, litigation, arbitral or other legal proceedings against Argentina relating to the Eligible Securities tendered, and to store, process and use the data contained in such letter(s) of transmittal only to the extent required for the settlement of the Invitation, for litigation reconciliation purposes or for the exercise by Argentina of any rights under the representations, warranties and covenants given in connection with the Invitation.
 
 
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 Limitation on Issuance and Allocation of the Par Option
 
Limit on Issuance of Pars
 
Argentina may issue Pars only up to a maximum aggregate principal amount of U.S.$2 billion or the equivalent in other currencies, using the applicable FX Rate 2010, the Par Option Maximum.  If the U.S. dollar equivalent of the principal amount of Pars that would be issued in respect of all Eligible Securities for which the Par Option is elected (after application of the Par Option Limit per Holder) does not exceed the Par Option Maximum, then Argentina will issue an amount of Pars equal to the total amount of Pars so elected by tendering holders pursuant to the Invitation.  If the U.S. dollar equivalent of the principal amount of Pars that would be issued in respect of all Eligible Securities for which the Par Option is elected (after application of the Par Option Limit per Holder) exceeds the Par Option Maximum, then Argentina will allocate the Par Option among tendering holders as set forth under “—Allocation of the Par Option” below.
 
Allocation of the Par Option
 
If the U.S. dollar equivalent of the principal amount of Pars that would be issued in respect of all Eligible Securities for which the Par Option is elected (after application of the Par Option Limit per Holder) exceeds the Par Option Maximum, then Argentina will allocate this maximum amount among tendering holders that have validly elected the Par Option on a pro rata basis.  To the extent that a tender of Eligible Securities electing the Par Option is prorated, it will be reallocated to the Discount Option.
 
The allocation of the Par Option among tendering holders will encompass all tenders electing Par Option submitted pursuant to the Invitation and, if concurrent with the Invitation, the offer in Japan, in each case after application of the Par Option Limit per Holder.  All determinations made by Argentina in the allocation of the Par Option as provided above will be final and binding.
 
No Limitation on Issuance of Discounts
 
There is no limit on the issuance or allocation of Discounts pursuant to the Invitation.  If you elect to receive any Pars and the amount you would receive (in the absence of any limitation on the issuance of Pars) would exceed the maximum amount of Pars that you are permitted to receive in the Invitation (as provided above), the Eligible Securities that cannot be exchanged for Pars as a result of that limitation will instead be exchanged for Discounts and related securities as if you had elected the Discount Option for those Eligible Securities.
 
 Discount Option
 
Tenders of Pre-2005 Eligible Securities
 
Subject to the terms and conditions of the Invitation, if you elect or are allocated the Discount Option with respect to any of your Pre-2005 Eligible Securities, you will receive a combination of the following New Securities in exchange for any Pre-2005 Eligible Securities you tender and Argentina accepts:
 
     Discounts;
 
     2017 Globals; and
 
●     GDP-linked Securities.
 
See the chart included on page S-26 for a summary of the New Securities you will receive if you tender Pre-2005 Eligible Securities pursuant to the Invitation and Argentina accepts your tender.
 
The Discounts issued pursuant to the Invitation will not be fungible with the corresponding 2005 Discounts issued by Argentina pursuant to its 2005 exchange offer.  However, each series of GDP-linked Securities, other than the GDP-linked Securities denominated in U.S. dollars and governed by New York law, issued pursuant to the Invitation will constitute a further issuance of, will be assigned the same ISINs and common codes as, and will trade fungibly with, the 2005 GDP-linked Securities.
 
 
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Total Consideration for Tenders of Pre-2005 Eligible Securities in Exchange for Discounts
 
Subject to the terms and conditions of the Invitation, if you are (i) a Large Holder that elects the Discount Option and tenders your Pre-2005 Eligible Securities on or before the Early Tender Deadline, (ii) a Large Holder that tenders your Pre-2005 Eligible Securities on or before the Expiration Date and elects the Par Option but is allocated Discounts, or (iii) a Small Holder that tenders your Pre-2005 Eligible Securities on or before the Expiration Date, you will receive the following combination of Discounts, 2017 Globals and GDP-linked Securities:
 
1.  
An original principal amount of Discounts equal to the product of the Eligible Amount of the Pre-2005 Eligible Securities you tender, multiplied by the exchange ratio set forth on page S-26 applicable to the Discount Option and the currency and governing law of your tendered Pre-2005 Eligible Securities.  The aggregate original principal amount of Discounts you receive will be rounded downward to the nearest one currency unit (e.g., U.S.$1.00).  The principal amount of Discounts you will receive upon settlement of the Invitation will also be adjusted for capitalized interest and, if you receive Discounts denominated in pesos, for inflation, each as described under “—Adjustments to the Principal Amount of Discounts.”  See the table on page S-26 for the currency and governing law of the Discounts, which varies depending on the currency and governing law of your Pre-2005 Eligible Securities.
 
2.  
A principal amount of 2017 Globals equal to U.S.$0.2907576, €0.2726930 or Ps. 0.2657117 for each U.S.$1.00, €1.00 or Ps. 1.00, respectively, original principal amount of Discounts that you receive in exchange for your tendered Pre-2005 Eligible Securities in the Invitation, rounded downward, if necessary, to 2 decimal places, adjusted, if your Discounts are denominated in a currency other than U.S. dollars, by the applicable FX Rate 2010, and rounded downward, if necessary, to the nearest U.S.$1.00.  This amount equals the total amount of interest that would have been paid to you in cash on the Discounts with respect to the period from December 31, 2003 to but excluding December 31, 2009 (including interest paid on December 31, 2009) if your Discounts had been issued as of and accrued interest from and including December 31, 2003 to but excluding December 31, 2009, at the rates per annum applicable to the 2005 Discounts during such period, which are set out below:
 
From and
 including
To but
 excluding
Currency
U.S. dollars
Euro
Pesos
December 31, 2003
December 31, 2008
3.97%
3.75%
2.79%
December 31, 2008
December 31, 2009
5.77%
5.45%
4.06%
 
This interest calculation includes (i) interest that would have been payable in cash on both the original principal amount of your Discounts and on the adjustments that would have been made to the principal amount of your Discounts in respect of capitalized interest and (ii) if you receive peso-denominated Discounts, interest paid in cash on the adjustments made to the principal amount of your Discounts in respect of Argentine inflation, based on the CER.  The principal amount of 2017 Globals that you receive will not be adjusted to reflect the 2017 Globals Issue Price.
 
Annex D sets forth the amount (expressed as a percentage of the original principal amount of Discounts to be received) of (a) the interest payments made in cash on the 2005 Discounts referred to in 2 above and (b) the capitalized interest on the 2005 Discounts referred to in 1 above with respect to the period from December 31, 2003 to but excluding December 31, 2009.
 
The exchange agent will be required to transfer on your behalf, on the Early Settlement Date or the Final Settlement Date, as applicable, a portion of the 2017 Globals that you are entitled to receive to or for the account of the international joint dealer managers in payment of their fee, calculated in accordance with “Plan of Distribution—Dealer Manager Agreement.”
 
 
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The total amount of 2017 Globals that you will actually receive will therefore be the amount referred to in 2 above (rounded downward to the nearest U.S.$1.00), minus the fee referred to in the immediately preceding paragraph.
 
3.  
A notional amount of GDP-linked Securities equal to the Eligible Amount of the Pre-2005 Eligible Securities that you tender and Argentina accepts in the Invitation or, if your Pre-2005 Eligible Securities are denominated in a currency other than the currency of the Discounts that you receive, the equivalent of your Eligible Amount in the currency in which your Discounts are denominated, translated into such currency using the applicable FX Rate 2003.  The aggregate notional amount of GDP-linked Securities that you receive will be rounded downward to the nearest one currency unit (e.g., U.S.$1.00).
 
As described below under “Description of the New Securities—General Terms of the GDP-linked Securities,” the GDP-linked Securities do not represent a right to receive principal or interest payments.  Rather, they represent the right to receive certain payments that are contingent upon and determined on the basis of the performance of Argentina’s gross domestic product.  Accordingly, the notional amount of the GDP-linked Securities does not represent a principal amount, but rather a theoretical number necessary to allocate payments under the GDP-linked Securities among the various holders of these securities and facilitate trading of these securities.
 
Hypothetical examples of the calculation of the Total Consideration, including the principal amount of Discounts, principal amount of 2017 Globals and notional amount of GDP-linked Securities that you may receive (after deduction of the international joint dealer managers’ fee), are set forth in Annex F-1.
 
You will not receive any payment or any other consideration in respect of any accrued but unpaid interest on your tendered Pre-2005 Eligible Securities for any period subsequent to December 31, 2001.
 
Consideration for Tenders After the Early Tender Deadline by Large Holders of Pre-2005 Eligible Securities in Exchange for Discounts
 
Subject to the terms and conditions of the Invitation, if you elect the Discount Option, are a Large Holder and you tender Pre-2005 Eligible Securities after the Early Tender Deadline, you will receive the Total Consideration for those Pre-2005 Eligible Securities minus a principal amount of 2017 Globals equal to U.S.$0.01 per U.S.$1.00 in Eligible Amount of Pre-2005 Eligible Securities that you tender and Argentina accepts or, if your Eligible Securities are denominated in a currency other than U.S. dollars, the equivalent of your Eligible Amount in U.S. dollars, translated into such currency using the applicable FX Rate 2003, and rounded downward, if necessary, to the nearest U.S.$1.00.
 
The exchange agent will be required to transfer on your behalf, on the Final Settlement Date, a portion of the 2017 Globals that you are entitled to receive to or for the account of the international joint dealer managers in payment of their fee, calculated in accordance with “Plan of Distribution—Dealer Manager Agreement.”
 
The Discounts, 2017 Globals and GDP-linked Securities issued on the Final Settlement Date will constitute a further issuance of, will be assigned the same ISINs and common codes as, and will trade fungibly with, the corresponding series of New Securities issued on the Early Settlement Date.  However, it is possible that the Discounts governed by New York law, the Discounts governed by English law and/or the 2017 Globals issued on the Final Settlement Date will have a greater amount of OID for U.S. federal income tax purposes than the corresponding series of New Securities issued on the Early Settlement Date.  If this is the case, Argentina intends to calculate and report OID, if any, with respect to any such series of New Securities based on the issue price of the New Securities issued on the Final Settlement Date.  See “Taxation—U.S. Federal Income Tax Consequences—Consequences of Holding the New Securities—Qualified Stated Interest and Original Issue Discount on the New Bonds” for further information.
 
 
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Par Option
 
Tenders of Pre-2005 Eligible Securities
 
Subject to the terms and conditions of the Invitation, if you elect, and to the extent that you are allocated, the Par Option with respect to any of your Pre-2005 Eligible Securities, you will receive a combination of the following New Securities and a cash payment in exchange for the Pre-2005 Eligible Securities you tender and Argentina accepts:
 
·  
Pars;
 
·  
cash payment; and
 
·  
GDP-linked Securities.

See the chart included on page S-26 for a summary of the New Securities you will receive if you tender Pre-2005 Eligible Securities pursuant to the Invitation and Argentina accepts your tender.

The Pars issued pursuant to the Invitation will not be fungible with the corresponding 2005 Pars issued by Argentina pursuant to its 2005 exchange offer.  However, each series of GDP-linked Securities, other than the GDP-linked Securities denominated in U.S. dollars and governed by New York law, issued pursuant to the Invitation will constitute a further issuance of, will be assigned the same ISINs and common codes as, and will trade fungibly with, the 2005 GDP-linked Securities.

Total Consideration for Tenders of Pre-2005 Eligible Securities in Exchange for Pars

Subject to the terms and conditions of the Invitation, if you elect, and to the extent that you are allocated, the Par Option with respect to any of your Pre-2005 Eligible Securities, you will receive the following combination of Pars, cash payment and GDP-linked Securities:
 
1.  
An original principal amount of Pars equal to the Eligible Amount of those Pre-2005 Eligible Securities multiplied by the exchange ratio set forth on page S-26 applicable to the Par Option and the currency and governing law of your tendered Pre-2005 Eligible Securities.  The aggregate original principal amount of Pars you receive will be rounded downward to the nearest one currency unit (e.g., U.S.$1.00).  If you receive Pars denominated in pesos, the principal amount of Pars you will receive upon settlement of the Invitation will also be adjusted for inflation, as described under “—Adjustments to the Principal Amount of Pars Denominated in Pesos.”  See the table on page S-26 for the currency and governing law of the Pars, which varies depending on the currency and governing law of your Pre-2005 Eligible Securities.
 
2.  
A cash payment of U.S.$0.0823250, €0.0743000 or Ps. 0.0517113 for each U.S.$1.00, €1.00 or Ps. 1.00, respectively, original principal amount of Pars that you receive in exchange for your tendered Pre-2005 Eligible Securities in the Invitation, rounded downward, if necessary, to the nearest U.S.$0.01, €0.01 or Ps. 0.01, as applicable.  This amount equals the total amount of interest that would have been paid to you in cash on the Pars with respect to the period from December 31, 2003 to but excluding September 30, 2009 (including interest paid on September 30, 2009) if your Pars had been issued as of and accrued interest from and including December 31, 2003 to but excluding September 30, 2009, at the rates per annum applicable to the 2005 Pars during such period, which are set out below:
 
From and
  including
To but
  excluding
Currency
U.S. dollars
Euro
Pesos
December 31, 2003
March 31, 2009
1.33%
1.20%
0.63%
March 31, 2009
September 30, 2009
2.50%
2.26%
1.18%
 
 
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If you receive peso-denominated Pars, the amount of your cash payment includes the cash interest that Argentina would have paid on your Pars in respect of the increases to the principal amount of your Pars in respect of Argentine inflation, based on the CER, during the period from and including December 31, 2003 to but excluding September 30, 2009.
 
Annex D sets forth the amount (expressed as a percentage of the original principal amount of Pars to be received) of the interest payments made in cash on the 2005 Pars referred to in 2 above.
 
The exchange agent will be required to transfer on your behalf, on the Final Settlement Date, a portion of the cash payment that you are entitled to receive to or for the account of the international joint dealer managers in payment of their fee, calculated in accordance with “Plan of Distribution—Dealer Manager Agreement.”
 
The total amount of cash that you will actually receive therefore will be the amount first referred to in 2 above (rounded downward to the nearest U.S.$0.01, €0.01 or Ps. 0.01, as applicable) minus the fee referred to in the immediately preceding paragraph. The table below summarizes the cash payment to a holder of U.S.$10,000, €10,000 or Ps. 10,000 Eligible Amount of Pre-2005 Eligible Securities that tenders such Eligible Securities and elects the Par Option, assuming that the Par Option is not prorated.
 
Cash Payment After Deduction of International Joint Dealer Managers’ Fee
 
Currency of
Par Bonds
Cash Payment in Respect
of Past Interest on Pars
 
Fee
Cash to be Received
by Tendering Holder
 
(per U.S.$10,000, €10,000 or Ps. 10,000 Eligible Amount
tendered or Original Principal Amount of Pars Received)
 
U.S. dollars
U.S.$823.25
U.S.$40.00
U.S.$783.25
Euro
€743.00
€40.00
€703.00
Pesos
Ps. 517.11
Ps. 40.00
Ps. 477.11

 
3.  
A notional amount of GDP-linked Securities equal to the Eligible Amount of the Pre-2005 Eligible Securities that you tender and Argentina accepts in the Invitation or, if your Pre-2005 Eligible Securities are denominated in a currency other than the currency of the Pars that you receive, the equivalent of your Eligible Amount in the currency in which your Pars are denominated, translated into such currency using the applicable FX Rate 2003.  The aggregate notional amount of GDP-linked Securities that you receive will be rounded downward to the nearest one currency unit (e.g., U.S.$1.00).
 
Hypothetical examples of the calculation of the Total Consideration, including the principal amount of Pars, the cash payment and notional amount of GDP-linked Securities that you may receive (after deduction of the international joint dealer managers’ fee), are set forth in Annex F-1.
 
You will not receive any payment or any other consideration in respect of any accrued but unpaid interest on your tendered Pre-2005 Eligible Securities for any period subsequent to December 31, 2001.
 
Discount Option and Par Option for Holders of 2005 Eligible Securities

The Total Consideration and Consideration that holders tendering 2005 Eligible Securities will receive are described under “—Terms of the Invitation Applicable Only to Holders of 2005 Eligible Securities” below.

 Adjustments to the Principal Amount of Discounts
 
Any Discounts you receive in exchange for your Eligible Securities will begin to accrue interest from and including December 31, 2009.
 
 
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The principal amount of Discounts you will receive upon settlement of the Invitation will equal the original principal amount to which you are entitled (as provided herein) plus an additional principal amount equal to the portion of interest that would have been capitalized during the period from and including December 31, 2003 to but excluding December 31, 2009 (including interest capitalized on December 31, 2009) had you been issued 2005 Discounts in Argentina’s 2005 exchange offer in the same original principal amount.  This adjustment will be made regardless of the type of Eligible Securities you tender, including if you tender 2005 Discounts, 2005 Pars or 2005 Quasi-Pars.  Argentina is making this adjustment on the 2005 Eligible Securities because the “Eligible Amount” of your Eligible Securities is their “original principal amount,” which is defined to exclude any interest capitalized on the 2005 Eligible Securities.

If the Discounts you receive are denominated in pesos, the principal amount of Discounts that you receive will, under the terms of the Discounts, be adjusted to reflect inflation, based on the CER, since December 31, 2003, as described under “Description of the New Securities—Special Terms of New Securities Governed by Argentine Law.”  This adjustment will be made regardless of the type of Eligible Securities you tender, including if you tender 2005 Discounts, 2005 Pars or 2005 Quasi-Pars.

Argentina understands that the clearing systems record and effect transactions in the Discounts based on their original principal amount.  Therefore, the adjustments to the principal amount of your Discounts will not be reflected in the amount shown on the statements you receive from the clearing system in which you hold your Discounts (if you are a direct participant in that clearing system) or in the statements that you receive from your custodian or other financial intermediary (if you are not a direct participant), because the Discounts will be credited and will trade in the clearing systems based upon their original principal amount.  They will, however, be effective for purposes of determining the accrued interest and principal amount payable on your Discounts.

Adjustments to the Principal Amount of Pars Denominated in Pesos
 
If you receive Pars denominated in pesos in exchange for your Eligible Securities, the principal amount of Pars that you receive will, under the terms of the Pars, be adjusted to reflect inflation, based on the CER, since December 31, 2003, as described under “Description of the New Securities—Special Terms of New Securities Governed by Argentine Law.”  This adjustment will be made regardless of the type of Eligible Securities you tender, including if you tender 2005 Discounts, 2005 Pars or 2005 Quasi-Pars.
 
This adjustment to the principal amount of your Pars will not be reflected in the amount shown on the statements you receive from the clearing system in which you hold your Pars (if you are a direct participant in that clearing system) or in the statements that you receive from your custodian or other financial intermediary (if you are not a direct participant), because the Pars will be credited and will trade in the clearing systems based upon their original principal amount.  This adjustment will, however, be effective for purposes of determining the accrued interest and principal amount payable on your Pars.
 
Currency Denomination of the New Securities
 
Discounts and Pars
 
The currency of the Eligible Securities that you tender and Argentina accepts will determine the currency in which the Discounts or Pars you will receive will be denominated, as follows:
 
·  
Eligible Securities denominated in U.S. dollars, euro (or any Eligible Securities originally denominated in a predecessor currency to the euro, which currencies for this purpose are deemed to have been originally denominated in euro) or pesos.  You will receive Discounts or Pars denominated in the same currency as your tendered Eligible Securities.
 
·  
Eligible Securities denominated in pounds sterling or Swiss francs.  You will receive Discounts or Pars denominated in euro.
 
Eligible Securities denominated in yen.  You will receive Discounts or Pars denominated in euro.
 
 
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While holders of yen-denominated Eligible Securities governed by Japanese law will not be able to participate in the Invitation, they may be able to do so pursuant to the invitation in Japan, if conducted by Argentina.  Argentina, however, will only launch an offer in Japan after having received all necessary regulatory approvals from Japanese authorities.  See “Global Offering―Invitation in Japan.”
 
2017 Globals
 
If you are entitled to receive 2017 Globals pursuant to the Invitation, the 2017 Globals you receive will be denominated in U.S. dollars.
 
GDP-linked Securities
 
If you are entitled to receive GDP-linked Securities in the Invitation, the GDP-linked Securities you receive in exchange for your Eligible Securities will be denominated in the same currency as the currency of the Discounts or Pars, as applicable, you receive in exchange for the same Eligible Securities.  However, the underlying calculations to determine the amount of payments owing under the GDP-linked Securities will be performed in pesos and the resulting amounts will be converted into the relevant payment currency as described under “Description of the New Securities—General Terms of the GDP-linked Securities.”
 
Solely for purposes of the Invitation, Argentina will treat Eligible Securities originally denominated in a currency other than pesos and governed by Argentine law as if they were denominated in the currency in which they were originally issued.
 
Governing Law of the New Securities
 
Discounts and Pars
 
If the Eligible Securities you tender are not governed by Argentine law, the governing law of any Discounts or Pars you receive will be as follows:
 
·  
Discounts or Pars denominated in U.S. dollars will be governed by New York law;
 
·  
Discounts or Pars denominated in euro will be governed by English law; and
 
·  
Discounts or Pars denominated in pesos will be governed by Argentine law.
 
If the Eligible Securities you tender are governed by Argentine law, you will receive Discounts or Pars governed by Argentine law.
 
2017 Globals
 
If you are entitled to receive 2017 Globals in the Invitation, all 2017 Globals you receive will be governed by New York law.

GDP-linked Securities
 
If you are entitled to receive GDP-linked Securities in the Invitation, the GDP-linked Securities you receive in exchange for your Eligible Securities will be governed by the law that governs the Discounts or Pars you receive in exchange for the same Eligible Securities.
 
Summary of Consideration for Pre-2005 Eligible Securities
 
The chart included on page S-26 summarizes the New Securities and, in certain cases, the cash payment you will receive if you tender Pre-2005 Eligible Securities pursuant to the Invitation, Argentina accepts your tender and your tendered Pre-2005 Eligible Securities are cancelled.
 
 
 
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No Maximum or Minimum Size of Invitation
 
Argentina has not set any limit on the principal amount of Discounts, the notional amount of GDP-linked Securities or the principal amount of 2017 Globals that may be issued pursuant to the Invitation; however, the U.S. dollar equivalent of the aggregate principal amount of Pars issued by Argentina in the Invitation may not exceed the Par Option Maximum.  Argentina has not set an express limit on the aggregate amount of cash payments that it will make pursuant to the Invitation, but this amount will be indirectly limited by the Par Option Maximum.  If the Par Option Maximum is reached, Argentina expects that the aggregate amount of its cash payments will be approximately the equivalent of U.S.$168 million.  In addition, Argentina has not conditioned the Invitation on any minimum level of participation by holders of Eligible Securities.
 
 Financing Condition
 
The acceptance by Argentina of tendered Eligible Securities and the settlement of the Invitation on the Early Settlement Date are subject to the condition that Argentina has received the proceeds of a concurrent offering of global bonds due 2017 for cash for an aggregate principal amount of not less than U.S.$1,000,000,000 on or before the Early Settlement Date.  Argentina reserves the right to waive this condition (or to issue a smaller amount of such global bonds) in the event that Argentina determines that market conditions do not permit the issuance of U.S.$1,000,000,000 of global bonds due 2017 on terms considered by Argentina, in its sole and absolute discretion, to be satisfactory.  For the avoidance of doubt, Argentina may not waive the Financing Condition if the concurrent cash offering is not priced, or Argentina does not receive the proceeds of the concurrent cash offering, in each case as a result of any court or arbitral order or legal proceeding seeking to attach such proceeds or to enjoin Argentina from receiving such proceeds or the subscribers from delivering such proceeds to Argentina or otherwise to frustrate the purpose of the concurrent cash offering, or having that effect.  The concurrent cash offering is being made pursuant to a separate offering document, not by this document.  If Argentina issues global bonds due 2017 in the concurrent cash offering, these global bonds due 2017 will constitute a single series with, have the same terms and conditions as, be assigned the same ISIN and common code as, and trade fungibly with, the 2017 Globals issued pursuant to the Invitation.
 
Cancellation Condition
 
The Invitation is conditioned on the cancellation of the Eligible Securities.  The Eligible Securities tendered by holders during the Invitation and accepted by Argentina will be cancelled on the Early Settlement Date or the Final Settlement Date, as applicable, prior to the issuance of the New Securities and the credit of the cash payments to the applicable holders’ accounts (which may take place over the course of several days).  If any court or arbitral order or administrative or legal proceeding prohibits or delays the cancellation of the tendered Eligible Securities, Argentina will postpone either or both of the Early Settlement Date or the Final Settlement Date, as applicable, until the Eligible Securities can be cancelled or, if in its judgment, cancellation cannot be effected without unreasonable delay, it will cancel the Invitation (or, if Argentina considers that the Eligible Securities affected thereby are, in its sole judgment, immaterial, Argentina may cancel the Invitation as to the affected Eligible Securities only) and return the Eligible Securities to the tendering holders.  Argentina may not waive this condition.
 
Other Conditions to the Invitation
 
Notwithstanding any other provisions of the Invitation, the Invitation is conditioned upon there not having been threatened, instituted or pending any action or proceeding before any court or governmental, regulatory, arbitral or administrative body that:  (1) makes or seeks to make illegal the exchange of Eligible Securities for New Securities; (2) would or might result in a delay in, or restrict, the ability of Argentina to issue the New Securities in exchange for Eligible Securities; or (3) imposes or seeks to impose limitations on the ability of Argentina to issue the New Securities in exchange for Eligible Securities.  Each of the foregoing conditions is for the sole benefit of Argentina and may be waived by Argentina, in whole or in part, at any time and from time to time, in its discretion.  Any determination by Argentina concerning the conditions set forth above (including whether or not any such condition has been satisfied or waived) will be final and binding upon all parties.
 
 
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 Expiration of Invitation; Termination; Amendments
 
The Invitation will expire at 5:00 P.M. (New York City time) on the Expiration Date, unless Argentina in its sole discretion extends it or terminates it earlier, in accordance with the terms described in this document.  However, in order for Large Holders to receive Total Consideration, they must tender their Eligible Securities by the Early Tender Deadline.
 
At any time before Argentina announces the acceptance of any tenders on the Early Announcement Date or the Final Announcement Date, as applicable (in the manner specified below under “—Acceptance of Tenders”), Argentina may, in its sole discretion and to the extent permitted by the applicable laws, rules and regulations in each jurisdiction where Argentina is making the Invitation:
 
·  
terminate the Invitation, including with respect to tenders submitted prior to the time of the termination;
 
·  
extend the Invitation past the originally scheduled Early Tender Deadline or Expiration Date, as applicable;
 
·  
withdraw the Invitation from any one or more jurisdictions; or
 
·  
amend the Invitation, including amendments in any one or more jurisdictions.
 
In addition, subject to applicable law, Argentina reserves the right to extend or delay the Early Settlement Date or the Final Settlement Date, to terminate the Invitation after the Early Announcement Date or the Final Announcement Date or to modify the settlement procedures in any way if:
 
·  
any court order or judgment is issued, or any legal proceedings are commenced with the purpose of preventing the cancellation of the Eligible Securities tendered, attaching payments to Argentina in connection with Argentina’s concurrent cash offering, attaching or enjoining the New Securities, impeding or attaching the cash payments pursuant to the Invitation or payments under the New Securities, preventing the release of claims, including any administrative, litigation or arbitral claims, preventing the termination of pending administrative, litigation, arbitral or other legal proceedings against Argentina in respect of the tendered Eligible Securities, preventing the satisfaction of any payment order, judgment, arbitral award or other such order against Argentina in respect of the tendered Eligible Securities, or otherwise having the effect of frustrating the purposes of the Invitation; or
 
·  
Argentina, in its sole discretion and to the extent permitted by applicable laws, rules and regulations, determines that such extension, delay, termination or modification is in the best interests of Argentina or the holders of Eligible Securities seeking to participate in the Invitation, in light of any court order, judgment or pending administrative, litigation, arbitral or other legal proceedings.
 
Argentina will announce any such termination, extension, withdrawal or amendment of the Invitation as described below under “¾ Announcements” and will publish any such announcement on the website of the Luxembourg Stock Exchange (www.bourse.lu).
 
 Irrevocability; Limited Withdrawal Rights
 
All tenders will be irrevocable and may not be withdrawn, unless Argentina:
 
·  
extends the Submission Period of the Invitation by more than 30 calendar days;
 
·  
is required to grant withdrawal rights by U.S. securities or other applicable laws; or
 
·  
otherwise determines, in its sole and absolute discretion, to grant withdrawal rights.
 
 
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In any of these cases, you will have the right to withdraw your tender for a period of 10 calendar days from the date Argentina first publicly announces (by means of a press release through the news services, as defined below under “—Acceptance of Tenders” and by publication on the website of the Luxembourg Stock Exchange (www.bourse.lu)) that it is granting withdrawal rights.
 
To effectively withdraw your tender, subject to the limitations described above, you must follow the procedures set forth below under “—Procedures for Withdrawal of Tenders.”  See “Risk Factors¾Risk Factors Relating to the Invitation¾Risks of Participating in the Invitation.”
 
 Acceptance of Tenders
 
Argentina has not set any limit on the principal amount of Discounts, the notional amount of GDP-linked Securities or the pr