01:35 am
Saturday 09 May 2020
–
Buenos Aires (dpa)
The deadline set by Argentina for its debt restructuring proposal expired on Friday without any immediate clarification on whether the international creditors had supported the proposal, the national news agency Tilam reported.
Financial market experts said there was an “important level of acceptance” in Argentina’s offer, but there was no information on the position of the investment funds, which would determine the outcome.
The Argentine government has said that it is open to dialogue, and believes that the negotiations will continue until Friday.
The offer to reschedule about $ 65 billion, representing the value of treasury bonds, aims to postpone payment of payments for a period of three years and write off 62% of the interest rate and 5.4% of the value of the basic installments.
It is noteworthy that Argentina is already suffering from an acute economic crisis before the outbreak of the Corona virus (Covid-19) also hit the economy.
The inflation rate in the country exceeds 50%, and the International Monetary Fund expects the economy to contract at a rate of 5.7% of GDP during the current year.
The government says that more than 20% of its revenue can go to debt installment service, which makes it impossible for it to meet its obligations to creditors.
Three groups of Argentine creditors rejected the latter’s offer to reschedule the debt. Creditors said the plan would incur disproportionate bondholders.
The creditors said in a joint statement issued on Monday that “each of the three bond holders’ groups, and the institutions they represent with other investors, would like to confirm that they cannot support Argentina’s latest debt swap offer.”
The creditors added that they considered “the conditions that Argentina wanted incurred by them to be disproportionate and unjustified and unnecessary losses”, but added that they wanted to reach “an acceptable solution to the financial challenges the Republic is currently facing.”
The three groups of creditors, which represent Argentina’s largest creditors, include BlackRock, Fidelity, GreyLock Capital and Ashmore.
But 138 economists from 20 countries, including Nobel Prize-winning economists Joseph Stiglitz and Edmund Phillips, backed Argentina’s proposal as “reasonable” and properly reflected the country’s ability to pay.
– .
