The Argentine government will continue to honor its debt while it works to reach an agreement with creditors, both the IMF and private bond holders, with the purpose of refinancing commitments and achieve a long term sustainable path for the payments, according to sources from the Economy ministry.
With the implementation of this strategy, Argentina announced this week it would proceed to pay the Discount and Centenary bonds, totaling the equivalent of some 550 million dollars, which means the country will have paid all maturing bonds in 2019, thus avoiding a new court problem. It will now have to concentrate in 2020, when most maturing takes place and hopefully, Argentina following negotiations can postpone for several years the payments' calendar, while the economy generates sufficient genuine dollars to ensure a manageable level of debt.
Allegedly the new Argentine government intention of renegotiating bonds maturing dates spurred a good reaction from investors, and this was seen in the strong revaluation of government bonds, mainly those nominated in Pesos.
Meantime the Economy minister Martin Guzmán anticipated the postponement of Treasury Bills maturing payments until next 31st August, equivalent to some 9 billion dollars of which US$ 6.5bn are in private hands.
This should give government some breathing space while the ministry invites investors to purchase Treasury bills in Pesos maturing in April and June, with generous interest rates.