MercoPress. South Atlantic News Agency
Argentina in “technical default” while negotiations with sovereign bondholders continue
Argentina “technically” defaulted on Friday for the second time this century after failing to pay US$505 million of interest on its bond debt, but it continues to negotiate a restructuring with creditors. “We're not paying but the negotiations are continuing,” a government official said. Read full article
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Disclaimer & comment rulesThe vultures are circling.
May 24th, 2020 - 11:18 am - Link - Report abuse 0Some may say I am nasty for being so buoyed by the news of Argentina’s default but the same people remain silent on the economic restrictions Argentina is enforcing upon us.
What goes around, comes around.
In Argentina’s case, economic meltdown just stays around.
May 24th, 2020 - 04:08 pm - Link - Report abuse 0Maybe a “technical default” is like a technical pregnancy.
May 25th, 2020 - 05:29 pm - Link - Report abuse +1Argentina is in default. So let's face it. Argentina has been in continuous default since January of 2002. And Argentina will be in default for a very long time, while it expects the rest of the world to pay for the effects of its pandemic.
Argentina, as any other country would, expects its government to negotiate on behalf if the citizens -- not the other way around.
May 26th, 2020 - 03:43 am - Link - Report abuse -2Upon taking office at the end of 2015, former president Mauricio Macri “negotiated” with the vulture funds and paid them over and above what they were asking.
After that, Macri went in a borrowing spree, taking debt in record amounts and at unmatched speed. The borrowed money wasn't used for any capital projects -- it just fed the government's day to day operation and capital flight - big time.
Argentina was in a financial crisis and technical default before Macri's end of term. It has become worse due to the pandemic. The bondholders must be commended for understanding Argentina's position and for keep the negotiation going.
As I said before, despite the naysayers, an agreement is in the horizon that will benefit all parties.
It amazes me that anyone will loan Argentina money when they have to know from history that they will be lucky to ever get the principle back much less interest....
May 26th, 2020 - 09:54 am - Link - Report abuse 0Marti Llazo
May 26th, 2020 - 05:42 pm - Link - Report abuse 0My brother once sent me a Birthday card saying:
“There is no such thing as slightly pregnant, military intelligence, a temporary tax, Father Christmas or money in birthday cards”.
Enrique Massot
Yes, it does look like there will be an agreement, as to who it benefits is another matter as is how long the new deal last.
Technical pregnancy: https://www.healthline.com/health/pregnancy/chemical-pregnancy
May 27th, 2020 - 09:42 pm - Link - Report abuse 0Looks like Argentina's default may not last long either.
tallison
May 29th, 2020 - 06:20 am - Link - Report abuse 0“It amazes me that anyone will loan Argentina money...”
Tallison: If you knew a thing or two about human nature then you would understand that greed recognizes no limits. You would also know humans are the only creatures to trip twice on the same rock.
The secret, Tallison -- but don't tell anyone -- is that Mauricio Macri used a secret weapon to get lenders from across the world to risk their money again: He paid them astronomical interest rates and set very tight repayment schedules. It's almost like he knew in advance he would never get re-elected, therefore would not have to deal with paying back the gargantuan debt he left to Alberto Fernandez to deal with.
Now you are no longer in the dark.
There has to be an economic reason for people to keep lending Argentina money, knowing the risk.
May 29th, 2020 - 03:05 pm - Link - Report abuse 0Big money people are rarely completely stupid, but are often greedy. Possibly the calculation is interest is high enough, repayment term short enough that you still make money when allowing for a default or two.
Frankly, there are people in the world far more deserving of sympathy than fat cats with their snouts in the trough.
If there is ever to be any kind of economic stability in Argentina, then at some point Argentina will need to be able to borrow at more normal rates.
Failing an economic miracle, large rises in the price of large exports like soya beans, or the discovery of enormous reserves of very valuable minerals, Argentina is going to have to borrow to get through this and recover.
Borrowing at current rates means it probably never will get through it.
Whatever your view about how Argentina got to this position, question is how to get out of this?
Whilst Sr Fernandez does seem to be getting the numbers and terms down, no sign of any plan beyond that.
@reeky: “.....former president Mauricio Macri “negotiated” with the vulture funds and paid them over and above what they were asking.”
May 29th, 2020 - 03:59 pm - Link - Report abuse 0Reeky is lying again. The negotiated settlement to be paid to the hedge funds, including Singer et alia, was considerably less than what was owed. A great deal of what was owed was due to the Kirchners' incompetence, in failing to pay what was owed over a long term, in pretending in that most peronist manner that it had no debt, and Argentina spent hundreds of millions in attempts to not pay what was owed.
The band of thieves in the pink house has still not indicated how it will turn around the inherently counterproductive anti-economy of Argentina. Other than by stealing from others, of course.
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