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Montevideo, September 25th 2021 - 13:05 UTC

 

 

Argentina ready to begin restructuring of US$ 70bn in foreign law bonds

Tuesday, March 10th 2020 - 18:01 UTC
Full article 7 comments
The country’s Peronist President Alberto Fernandez has said Argentina cannot pay back what it owes without being given more time to revive growth The country’s Peronist President Alberto Fernandez has said Argentina cannot pay back what it owes without being given more time to revive growth

Argentina will revamp as much as US$ 68.8 billion in foreign law bonds as it restructures its debt, the government said in a decree on Tuesday, paving the way for tense negotiations as the country looks to strike a deal with creditors this month.

The decree, which follows a debt bill passed by the Senate in February, comes as Argentina battles to reach a restructuring agreement with bondholders by the end of March to avoid a damaging sovereign default.

The decree covers sovereign bonds under foreign legislation and courts in New York, London and Tokyo.

Argentina, Latin America’s No. 3 economy and a serial defaulter, is facing a major debt crisis amid stalled economic growth and a plunge in the peso currency which has driven up the country’s borrowing costs in dollars.

The country’s Peronist President Alberto Fernandez, who came to power late last year, has said Argentina cannot pay back what it owes without being given more time to revive growth. It now faces a tough challenge to get creditors on board.

“We anticipate difficult negotiations ahead,” financial services firm Citi said a note to clients on Tuesday.

Argentina plunged into economic crisis in 2018 and was forced to turn to the International Monetary Fund for a US$ 57 billion credit facility. The crisis worsened last year with recession, stubborn inflation and a tumbling peso.

The IMF has backed the government view that debt levels are unsustainable and called on private creditors to make a “meaningful contribution” to help resolve the crisis, indicating potential large haircuts on holdings.

Argentine officials met with bondholders including Pimco, Gramercy Funds Management and BlackRock Inc (BLK.N) earlier this month, while negotiations with the IMF are ongoing, with both sides heralding “constructive” talks.

Argentina over-the-counter bonds RPLATC and the local Merval stock exchange .MERV rebounded strongly on Tuesday after sharp losses on Monday that were sparked by global fears over a coronavirus outbreak and an oil price war.

Categories: Economy, Politics, Argentina.

Top Comments

Disclaimer & comment rules
  • Marti Llazo

    I seem to recall that about 4 years ago I predicted, with unsurprising accuracy, a new set of Argentine defaults taking place right about now. Mirá vos.

    Mar 10th, 2020 - 09:29 pm +2
  • Marti Llazo

    Still the arsehole, I see.

    Mar 11th, 2020 - 12:32 am +2
  • Marti Llazo

    Tinkle: ” 2) Argentina has been in technical default since the 01/10/2019...”
    ----
    Technically, Argentina has been in continuous uninterrupted default since January of 2002, and quite possibly prior to that date as well. Just because they don't admit it doesn't mean it's not the case.

    Mar 14th, 2020 - 09:07 pm +1
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