Creditors have criticized the current Argentine government of the country for what it describes as erratic economic policies claiming they are impeding growth and weighing on bond prices five months after the government restructured some US$ 65 billion in foreign bonds.
Argentina’s state-managed oil giant expects to avoid a costly default next month after it won support for a debt swap from a large creditor group. The so-called Ad Hoc Bondholder Group, which holds 45% of YPF’s 2021 notes, expressed support for the exchange after the company increased its cash sweetener over the weekend.
Brazilian president Jair Bolsonaro has been s skeptical of the coronavirus pandemic and the effectiveness of different vaccines to contain it, arguing that the economy, jobs and activity, were the priority above sanitary recommendations. As a result of this approach, his administration's federal spending jumped almost 40% between January and November, according to the Institute of International Finance. And Bolsonaro had even admitted the country is “broke.”
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 will extend negotiations over a US$ 65bn debt restructuring proposal until May 22, the government said in the official gazette on Monday. The extension sets the stage for tense last-ditch talks as Argentina races to avoid default.
Argentina said it didn’t make US$ 500 million in debt payments due Wednesday, starting a 30-day countdown to a possible default unless the government and bondholders can reach a deal on restructuring its massive foreign debt.
The coronavirus outbreak in Ecuador is increasing pressure on President Lenin Moreno to default on US$ 17 billion in debt and devote more resources toward fighting a pandemic that has left bodies in the streets of the nation’s largest city.