MercoPress. South Atlantic News Agency

Creditor group tables new offer to Argentina's debt negotiations

The new offer will provide Argentina with US$ 39 billion of cash-flow relief over the next eight years, the ACC said

One of Argentina's main creditor groups, the Argentina Creditor Committee, confirmed on Friday that it had tabled a new offer to the country's government as part of ongoing debt renegotiations.

The new offer, which was tabled on Thursday, will provide the government with US$ 39 billion of cash-flow relief over the next eight years, the ACC said, and includes a requirement that two-thirds of bonds must participate in any deal.

Debt specialists see the participation threshold as an important step. If the government did not accept it they say it could signal an intention to adopt a so-called 'Pac-Man' strategy' where the government tries to get investors to deal with it one at a time.

“The ACC continues to believe that the best way forward is a consensual resolution,” the group said in a statement.

Sources on Thursday said the new ACC offer valued bonds at around 54.5 cents on the dollar. That would be a modest drop from its previous offer of around 55-56 cents but would still be above the government's last proposal of 50 cents plus sweeteners.

The ACC added that its offer would leave creditors with a weighted average coupon of 3.95% on their bonds with a 5% maximum. Eligible bonds would also maintain their original indentures - the contract associated with the bond - meaning they would not have inferior legal guarantees.

The move comes at a crucial stage in the US$ 65 billion debt renegotiations with the Argentine government.

Talks have been extended a number of times in an effort to reach a deal, though the two biggest creditor groups, the “Ad Hoc” and “Exchange” groups, which hold a combined US$ 21 billion of the US$ 65 billion, have complained this week of the ongoing lack of engagement from the government.