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Montevideo, August 6th 2020 - 02:11 UTC

 

 

Argentine president said no plans to bail out Buenos Aires province, the richest of the country

Tuesday, January 14th 2020 - 09:58 UTC
Full article 14 comments
“This is the strictest reality,” Fernandez said. ”We have to be patient; we are aware of the problem. “This is the strictest reality,” Fernandez said. ”We have to be patient; we are aware of the problem.
The drop came after Economy Minister Martin Guzman said that the national government was not considering a “financial bailout” The drop came after Economy Minister Martin Guzman said that the national government was not considering a “financial bailout”

Argentine President Alberto Fernandez on Monday night confirmed that the national government had no plan to bail out Buenos Aires province, which has a payment due later this month on hard-currency provincial debt.

In an interview with the C5N television channel, Fernandez said no provision had been made for such a move in the country´s budget.

“This is the strictest reality,” Fernandez said. “We have to be patient; we are aware of the problem.

”The only culprits are those who destroyed the economy of the Province of Buenos Aires,“ he added, in a swipe at the previous administration.

Provincial bonds maturing this year and through 2027 fell between one and 10 points on Monday, with the January 2021 maturity AR058449334=, tied to a more than US$ 250 million amortization payment due in two weeks, down six points at 60 cents according to Refinitiv data.

The drop came after Economy Minister Martin Guzman told local newspaper Clarin in an interview published on Sunday that the national government was not considering a ”financial bailout,“ something that had been reported locally.

Roger Horn, emerging markets desk analyst at SMBC Nikko Securities America said the comments could affect the government's wider negotiations for the restructuring of about US$100 billion in debt.

”I had thought the provinces would piggyback on whatever the sovereign does in terms of restructuring, but now my concern is that they default ahead of the sovereign or they rush to do a restructuring. If it is a very negative restructuring, then that would have a negative effect on the sovereign debt restructuring,“ he said.

Buenos Aires province, Argentina's largest, said last week it was seeking talks for ”temporary financial relief“ with holders of its 10.875% bond due in 2021.

”What we've heard from the federal government suggests there's quite a bit of willingness to negotiate its debt in good faith, but there's willingness and there's capacity, and even if the willingness is there, Argentina is in a very difficult spot,” said Todd Martinez, director of Latin America sovereigns at Fitch.

Argentina has been grappling with a pervasive debt crisis since 2018. Conservative former President Mauricio Macri was defeated by center-left Fernandez on Oct. 27.

The Fernandez administration, which took office on Dec. 10, is in talks with bondholders and other creditors including the International Monetary Fund. At the weekend, Fernandez set a March 31 deadline to renegotiate Argentina's public debt.

Categories: Economy, Politics, Argentina.

Top Comments

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  • kelperabout

    At least our Country is in good financial shape from all those millions that is made from the succesful fishing industry.
    Bet Argentina would love to have some of that wealth no matter how small it may look

    Jan 15th, 2020 - 01:41 am +1
  • kelperabout

    Nothing new then. Argentina seeking to restructure its debt.
    More like default on it as they have in the past.
    One very financially sick Country that is desperate to steal another's homeland to extract that wealth to save their own declining economy.
    The once mighty rich Country is now the most heavily in debt in the whole of Latin America.

    Jan 14th, 2020 - 10:17 am 0
  • pgerman

    Hay Enrique ... Enrique !!!

    The debt that the Province of Buenos Airess will no honor are bonds issued by the provincial government in 2011. Are bonds issued during the governorship of the Peronist Daniel Scioli.

    It's very simple, Peronism has theft in its DNA. In a month, the new President frozen the salaries of the retirees, applied a tremendous tax increase to the middle class (which will possibly make it disappear) and now this ...

    Enrique...please...let us know your opinion about the bonds issued during year 2011...

    Jan 14th, 2020 - 02:24 pm 0
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