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Argentina sets out its debt restructuring proposal to private creditors with a sizeable cut (62%) of interest payments

Friday, April 17th 2020 - 09:59 UTC
Full article 21 comments

Argentina sketched out its debt restructuring proposal to international creditors on Thursday, involving a three-year grace period, large coupon cuts and a smaller reduction in capital, as it looks to win over bondholders to a deal. Read full article

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  • tallison46

    Here we go again......

    Apr 17th, 2020 - 10:44 am - Link - Report abuse +3
  • pgerman

    The funny thing is that all of us, argentine citizens, bondholders and Argentine officials of the current Government know that in 2023 the new agreement will not be honored. When you are a scammer ...

    Apr 17th, 2020 - 01:52 pm - Link - Report abuse +2
  • Marti Llazo

    That's not a haircut. That's a decapitation.

    Argentina: The Perpetually Failed State.

    Apr 17th, 2020 - 02:51 pm - Link - Report abuse +2
  • Jo Bloggs

    Groundhog day.

    Would someone on MP be willing to lend me £100,000 at 4% APR? I don't want to start paying you back until 2025 and I would only be prepared to pay 1% interest and only £50,000 of the capital.

    These jokers make a Banana Republic look viable.

    No doubt Enrique is about to explain that it's entirely somebody else's fault.

    Chuckle chuckle

    Apr 17th, 2020 - 09:57 pm - Link - Report abuse +5
  • Enrique Massot

    It is not surprising that MP's distinguished commentators would come up with their usual xenophobic, biased and doomsayer sort of postings.

    However, Argentina has now a balanced team that is trying to make the best out of a bad situation -- and that includes those who bought debt titles like hot cakes during the four-year term of Mauricio Macri.

    Economy minister Martin Guzman's proposal is a very balanced one, especially in light of the situation created by the COVID-19 pandemic, that came on top of an already impossible impasse created by Macri's irresponsible borrowing at sky-high interest rates and an impossible repayment schedule.

    Guzman's proposal really is a pretty decent one that places the value of Argentine debt a bit above the titles' current market value while allowing the country not to crush its population under the weight of an austerity program as usually proposed by so many previous governments.

    If the lenders do not take the offer and force a default, they'll be no further ahead -- but Argentina will also have a handful of years' reprieve.

    Let them bark, Sancho.

    Apr 19th, 2020 - 04:35 pm - Link - Report abuse -4
  • Marti Llazo

    Reeky: “Argentina has now a balanced team...”

    That is the funniest thing I have ever heard.

    The Fernández offer was flatly rejected by creditors. Rejected as little more than a joke. A Peronist joke. Though that would be redundant. Of course, a “balanced team” from Argentina would hardly be the paragon of seriousness.

    Fitch has already pretty much downgraded Argentina to “in default.” That Argentina's default will broaden and deepen is hardly to be contested.

    As the media are explaining this, “Argentina has a new plan for paying off its $70 billion in foreign debt, and that plan is to not pay it.”

    Defaultina.

    Winter is coming. And with it, default, inflation, unemployment, higher taxes, capital flight, emigration, shortages, and hunger in Argentina. All because the Argentines are incapable of running a country.

    Apr 19th, 2020 - 06:34 pm - Link - Report abuse +3
  • Enrique Massot

    ML

    “Winter is coming. And with it, default, inflation, unemployment, higher taxes, capital flight, emigration, shortages, and hunger in Argentina.”

    How funny of Marty. It sounds more like wishful thinking than rational analysis. But hey, that is what ML and pgerman routinely do no matter what. One would suspect they have a wheelbarrow full with Argentina bonds.

    Reality is, the Macri government borrowed at very -- very high interest rates. Why? Because lenders would add the country's factor risk. The risk revealed real -- indeed, Macri borrowed much more than it was prudent, and for no purpose at all but to finance operations -- and most of everything, capital flight.

    No wonder economy minister Martin Guzman's offer focuses, most of all, in a reduction of interest rates adding to repayment delays. This time, Argentina has the support of the IMF, who sent in their auditors and certified that the debt levels are unsustainable.

    The ball is now on the lenders' court. They, for sure, are not happy and demand Argentina to keep going Macri-style austerity. President Fernandez said from the get go that chastising the citizens is not in the cards.

    We'll know soon enough whether greed or pragmatism wins the day.

    Apr 19th, 2020 - 06:55 pm - Link - Report abuse -4
  • Marti Llazo

    Reeky continues to misunderstand, saying.....

    “The ball is now on the lenders' court. ”

    No, Reeky. The creditors have rejected Argentina's absurd and insincere offer.

    What part of “no” do you not understand, Reeky?

    “...the IMF, who sent in their auditors and certified that the debt levels are unsustainable.”

    The same IMF auditors who certified and approved the loans to the Macri government. And they are to be believed now?

    Apr 19th, 2020 - 09:31 pm - Link - Report abuse +4
  • imoyaro

    As always, with Kamerad/Komrade Rique, Theft = Genius !

    https://oi1290.photobucket.com/albums/b521/imoyaro/chantapufi3_zpsgzwcn4qh.gif

    Apr 20th, 2020 - 12:11 am - Link - Report abuse +1
  • Enrique Massot

    ML

    Again, ML expresses wishful thinking but little knowledge about how anyone starts a negotiation -- of course everybody will now say Argentina's offer is not acceptable. It can go both ways of course -- but there is no done deal yet, as players expressed in talking to the Financial Times or to the New York Times a couple days ago:

    “Argentine bonds raced higher on Friday, shrugging off a tough proposal to restructure the country's foreign debt that prompted a downgrade by Fitch, as creditors held onto cautious optimism that a deal could be struck to avoid a messy default,” noted the NYT.

    I will predict that, in the current circumstances, the creditors will take a very careful look at the Ches' offer.

    But hey, what do we know? Perhaps the investors hadn't yet heard directions from Marti.

    https://www.nytimes.com/reuters/2020/04/17/world/americas/17reuters-argentina-debt.html


    ”...it was unclear whether the leftist government’s attempt to avoid all debt obligations for the next three years and cut interest payments by 62 per cent represented a final offer, or just the beginning of tough negotiations.

    Apr 20th, 2020 - 03:19 am - Link - Report abuse -3
  • imoyaro

    Either way, it's all a scam, and the people will be forced to pay for it in the worst sort of way in the long run, while the usual suspects continue to live high on the hog...

    https://oi1290.photobucket.com/albums/b521/imoyaro/chantapufi3_zpsgzwcn4qh.gif

    Apr 20th, 2020 - 03:35 am - Link - Report abuse +1
  • Enrique Massot

    The truth is, former president Macri did not act in Argentina’s best interests but fosters his and his associates selfishness. He did not even dare going to the Congress with his borrowing plans.

    Those who purchased Argentine debt papers knew or should have known their risks.

    Of course, had Macri won a second term, he would’ve sold the whole country for peanuts, because he is on the lenders’ side.

    Fortunately, the Argentines saw the scam and thwarted the maneuver.

    Now, the lenders face Argentine negotiators who hold the country’s interests at hart — of course they aren’t happy! Nor are the usual suspects in this forum.

    Sangran por la herida and that’s all right.

    Apr 20th, 2020 - 04:03 pm - Link - Report abuse -4
  • Marti Llazo

    To help Reeky understand matters, here is a reminder of the rejection of the insincere and insulting “offer” made by the Fernández government, and the creditors' call for the country to act instead “in good faith.”


    Deuda: grandes bonistas ya avisan que rechazan la oferta argentina y reclaman negociar “de buena fe”

    https://www.clarin.com/economia/economia/deuda-grandes-bonistas-avisan-rechazan-oferta-argentina-reclaman-negociar-buena-fe-_0_aHuwDKJt4.html

    Reeky seems to forget that Argentina had contracted for goods and services and had received enormous benefit from this, and of course now it is simply not convenient to honour their contracts. And he characterises this as “greed” on the part of the providers. Let us not forget that this time, as the time before that, working people around the world have invested in Argentina as a part of their retirement savings. When Argentina defaulted in 2001-2002, tens of thousands of Italian (and other) pensioners lost much of their retirement, and many of them didn't live long enough to see any sort of recovery of that after the Macri government attempt to make good on that old debt. And so once again Reeky and Argentina are endorsing what is best characterised as little more than serial theft and criminal perfidy. It's the Argentine Way.

    Apr 20th, 2020 - 04:33 pm - Link - Report abuse +1
  • pgerman

    Enrique

    Let me remind you two things:

    First) All the bonds currently in default (from two argentine provinces and one the Federal Administration) were issued during year 2015 by Daniel Scioli (Bs As), Luis Beder Herrera/Sergio Casas (La Rioja), and CFK (Federal Government).

    Second) Brazil has almost the same ratio debt/GDP (a little bit higher than 90% and just a couple of points below Argentina) and they never mentiones anything about a “default”. The brazilian risk country is 330 points while the argentine one is 4,000 points.

    PLEASE, DON'T BLAME MACRI FOR THIS NEW ARGENTINE DEFAULT !!!.

    Apr 20th, 2020 - 07:54 pm - Link - Report abuse +4
  • imoyaro

    Kamerad/Komrade Rique has always demonstrated contempt for people who work and save their money. As a product of Viveza Criolla, such people are considered fools, and to a politically ideological extremist like himself, bilking and robbing them is a matter of faith. Pgerman, as Zaphod correctly pointed out, facts and truth are like kryptonite to Kamerad/Komrade Rique...

    Apr 20th, 2020 - 10:30 pm - Link - Report abuse +1
  • Marti Llazo

    Rejected.

    “ Bondholders reject Argentina’s debt offer -
    Creditors denounce government restructuring plan as unacceptable”

    https://www.ft.com/content/558582bb-3e7e-45f0-a122-f4b0d2fb05be
    ---------

    “Bondholders Reject Argentina’s Debt Restructuring Proposal
    Move by the Argentina Credit Committee raises the odds of another default as early as May”

    https://www.ft.com/content/558582bb-3e7e-45f0-a122-f4b0d2fb05be
    --------
    “Bondholder groups reject Argentina's restructuring offer”

    https://www.ft.com/content/558582bb-3e7e-45f0-a122-f4b0d2fb05be
    --------------


    “ Major asset managers reject Argentina debt restructuring proposal ”

    https://www.ft.com/content/558582bb-3e7e-45f0-a122-f4b0d2fb05be
    ------

    Apr 21st, 2020 - 12:30 am - Link - Report abuse +3
  • tallison46

    Macri had nothing to do with the madness that's going on.... He tried to run the country correctly and worked with what he had to work with.....

    Apr 21st, 2020 - 03:25 am - Link - Report abuse +2
  • DemonTree

    “Macri had nothing to do with the madness that's going on.”

    If reality doesn't match the theory then reality must be wrong...

    Pgerman
    ”Second) Brazil has almost the same ratio debt/GDP (a little bit higher than 90% and just a couple of points below Argentina) and they never mentiones anything about a “default”. The brazilian risk country is 330 points while the argentine one is 4,000 points.“

    Debt to GDP ratio is just one measure of risk. The two countries are not comparable because Brazil is paying vastly lower interest rates on their debt than Argentina. Figures for today:

    ”The Brazil 10Y Government Bond has a 6.913% yield.“

    ”The Argentina 10Y Government Bond has an estimated 24.755% yield.”

    It's like the difference between owing $100,000 in credit card card debt and having a $100,000 mortgage. The latter is a perfectly reasonable situation whereas the former will rapidly lead to bankruptcy.

    Apr 21st, 2020 - 01:03 pm - Link - Report abuse -2
  • pgerman

    DT

    I totally agree that Argentina pays much more interest on its debt than Brazil on its debt. This is precisely as a consequence of country risk and the what current (and also former) politicians say and do.

    With a slightly higher debt/GDP level in the first week of August/2019, the country risk of Argentina was 890 points. When Alberto Fernandez won the PASO elections the Country Risk skyrocketed up to 1748 points. Since then it has only gone up. It is quite clear that the political project is responsible for the increase in Country Risk and the infeasibility of the payment of the Argentine debt at present.

    Apr 21st, 2020 - 03:21 pm - Link - Report abuse +1
  • Enrique Massot

    It is amazing how this little club of Peronism-bashing people are quick to give negative points to anybody who dares to contradict their high “wisdom.” DT is readily given a minus 1 just for pointing out a simple fact: the sky-high interest rates Argentina has to pay. Oh, but they readily give a two-point endorement to Tallison, who attempts to justify former president Macri, who “tried to run the country correctly.” Give me a break.

    Technicalities aside, Alberto Fernandez and his economy minister Martin Guzman have given creditors the opportunity to keep their Argentine accounts in the black while allowing the country to get back in its feet and pay back its debt. This is not that different -- listen up, distinguished MP commentators -- to the negotiation Nestor Kirchner brought about in the early 2000s that ended up in Argentina cancelling its debt with the IMF in 2006.

    You have a right to your opinion -- not to your own facts.

    Apr 22nd, 2020 - 04:51 am - Link - Report abuse -2
  • DemonTree

    Pgerman
    Argentina was already paying higher interest under Macri, as that and issuing debt in USD was required to make it attractive to investors. Everyone knew investing in Argentina was more risk than Brazil, but investments are a gamble - more risk, more potential reward but more chance of loss.

    But the results of the PASO and then Alberto's election really did negatively affect the economy. It's ironic that fear of a Peronist default makes one even more likely.

    Apr 23rd, 2020 - 09:54 pm - Link - Report abuse 0

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