News Progress in Argentina's debt restructuring negotiations

Progress in Argentina’s debt restructuring negotiations

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Argentine President Alberto Fernandez said that Argentina’s negotiations with creditors on the $ 66 billion debt restructuring plan were making progress, as the deadline had been extended again to conclude an agreement.

“The negotiations are progressing sporadically,” Fernandez told Radio Nacional. In 2005, when we renegotiated debt, it took a year. Now it’s been two or three months and we’re calling for a result. “What is needed is to reduce anxiety and persistence.” Argentina has extended the deadline for the fourth time.

The government said in a statement that the new deadline was set for July 24, “to continue discussions and allow investors to contribute to a successful restructuring.”

This news was reflected by an increase of 8% on the Buenos Aires Stock Exchange. It came during a week in which the renegotiation talks seemed to have collapsed after a group of creditors representing 13 international funds revealed on Tuesday night that they would not accept Argentina’s latest offer and were considering referring the South American state to court in New York. Crisis Argentina responded by proposing an alternative offer of bondholders under foreign law, but there remains a common ground on interest rates and the grace period. Fernandez added: “We are confident that we will reach an agreement. But (Covid 19) completely complicated matters. Many creditors are waiting for the pandemic to end, to negotiate in better conditions. ”

The pandemic has added to the suffering of Argentina’s economy, which is already suffering from two years of recession and is expected to contract by 6.5% this year.

Almost a month has passed since Argentina defaulted for the ninth time after failing to pay $ 500 million in interest on its bond debt, knowing that it is one of the world’s leading countries in food exports. Argentina, which is locked in tough negotiations, received support from the International Monetary Fund, in its attempt to reach an agreement with creditors, but Fernandez insists that any new deal must be sustainable. In its original offer to creditors in April, the government asked bond holders for a three-year grace period to pay off debts, a 62% reduction in interest amounting to $ 37.9 billion, and 5.4% on equity, or 3, 6 billion dollars.

Creditors refused this and the government raised its conditions, but insists that it will not give creditors more than 50 cents to the dollar, while the negotiating committee says it will accept less than 55 cents. The bonds that Argentina is trying to disburse represent nearly a fifth of the country’s $ 324 billion in debt and account for about 90% of its gross domestic product. About 35% of its 44 million people live in poverty.

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