The committee considered that the Buenos Aires bid “places a disproportionate portion of the effort on the shoulders of international bondholders.”
On Friday, the government of Alberto Fernandez (center-left) presented a proposal to its private sector creditors to restructure the public debt stipulating the cancellation of 62 percent of the interest, equivalent to $ 37.9 billion, and 5.4 percent of the principal debt, equivalent to 3.6 billion. Dollars.
Argentina also requested a three-year moratorium on debt payments, meaning that no payment be made before 2023.
Through this step, the government aims to renegotiate approximately $ 70 billion of bonds in foreign currency that fall within international jurisdiction, which means that they may be the subject of international arbitration.
A second group of bondholders, which owned 16 percent of the bonds issued between 2005 and 2010, rejected the Buenos Aires proposal.
These creditors said in a statement, “Unfortunately, the view of the bondholder group was not taken into account” in the bid by the government, which is therefore “unacceptable”.
For its part, the Argentine Economy Ministry was not surprised by the reaction. “This was to be expected,” a source from the ministry told AFP, requesting that his name not be published.
Matthias Rachnerman, economist at the Ecultina Office for Studies, considered that “the creditors’ refusal is not always a good thing, but this is reasonable because the offer is subject to improvement and this is a negotiation path.” And Buenos Aires gave its creditors 20 days to submit their response, that is, until May 7.
The next payment that Argentina must pay is $ 500 million, due on April 22, but can be extended for another month before Buenos Aires is considered default. Argentina’s total debt stands at $ 311 billion, which represents more than 90 percent of GDP.
(France Brush)
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