Argentina is still working with its creditors to reach a debt restructuring deal after talks stalled, though there is still a distance to cover in economic and legal terms, Economy Minister Martin Guzman said on Thursday.
Argentina extended a deadline for bondholders to accept a debt restructuring proposal for the fifth time as creditors blamed the government for “walking away” from talks.
Argentina extended the deadline to negotiate with its creditors to June 12 and may sweeten its most recent restructuring offer, the country said on Monday, after a previous proposal was deemed insufficient by some investors.
Argentina received a debt restructuring proposal from two creditor groups a step in the right direction, Economy Minister said on Friday. Nevertheless, it still fell short of what the country needed to strike a deal.
Argentine bonds rose strongly on Tuesday on optimism that a restructuring deal being brokered with creditors could be in reach, even as rating agencies slapped the country with downgrades after it defaulted for the ninth time last week.
Argentina technically defaulted on Friday for the second time this century after failing to pay US$505 million of interest on its bond debt, but it continues to negotiate a restructuring with creditors. We're not paying but the negotiations are continuing, a government official said.
The Argentine Ministry of Economy extended until June 2 the term to renegotiate the US$ 67 billion of debt securities issued under foreign law, with the aim of continuing negotiations with creditors.
The International Monetary Fund expressed optimism that Argentina can reach an agreement with private creditors “to establish a sustainable path in the future” when the government of President Alberto Fernandez formally extended the deadline term to reach an understanding on the US$ 67 billion debt.
Argentina’s Economy Minister Martin Guzman has hinted that make-or-break talks with international creditors are likely to continue beyond the looming May 22 deadline. It has tentatively elevated hopes that the crisis-prone country will be able to avoid its ninth sovereign debt default.
Argentina’s government and its creditors are edging toward a deal to revamp US$ 65 billion in foreign debt but still have a distance to close between an initial offer from the government and counteroffers from bondholders ahead of a Friday deadline.