Argentina Withholds German Art Loan
By MICHAEL CASEY

BUENOS AIRES -- Argentina's National Museum of Fine Arts is withholding some key art pieces from an exhibition in Frankfurt out of concern that German bondholders would seize them.

The standoff is the latest development in Argentina's marathon legal battle with holders of $30 billion in defaulted bonds.
The organizers of the 2010 Frankfurt Book Fair have invited the South American country to showcase its artistic heritage.

But the custodians of Argentina's national art collection are unable to comply with the German curator's request because of the country's ban on overseas art loans aimed at preventing litigant creditors from seizing government-owned assets.

"No art that's deemed part of the national patrimony is allowed to be lent overseas because it runs the risk of being seized by bondholders," said Maria Antonia Bychowiec of the museum's strategic administration division.

A Foreign Ministry official who is handling the request wasn't available to comment.
Holdout creditors who rejected harsh terms of the 2005 debt-exchange offer have sought to legally attach various Argentine government assets to enforce their court-recognized claims.

German retail investors, whose claims totaled up to $6 billion at the time of the 2005 restructuring, were among the hundreds of thousands of bondholders world-wide who were hurt by Argentina's record-breaking default in December 2001.

Argentina may be eager to reach a deal with the holdouts over their debt so the country can restore access to foreign credit markets, for which resolving the defaulted debt is a precondition.

Write to Michael Casey at michael.j.casey@dowjones.com