Argentina extends debt deadline to May 22
ARGENTINA on Monday extended debt restructuring talks with international creditors by a further two weeks to May 22, the deadline for a 500 million bond repayment.
Buenos Aires has been deadlocked with creditors over 65 billion of its debt, with the three main bondholder groups rejecting a government restructuring proposal that expired on Friday.
A 30-day grace period for a 500 million bond payment that Argentina already missed expires on May 22.
“This extension is considered necessary in the framework of the good faith negotiations that Argentina has carried out with its creditors to restore the sustainability of public debt under foreign legislation,” according to the official gazette.
It said the government was aiming to “increase participation” of bond-holders though it did not reveal the level of support it had received from creditors for its offer.
Economy minister Martin Guzman has taken an aggressive stance on debt, partly driven by a need to free up resources to tackle the coronavirus pandemic in the recession-hit South American nation.
Buenos Aires’ offer to its creditors includes a 62 percent discount on interest ( 37.9 billion) and 5.4 percent on capital ( 3.6 billion).
The country is also requesting a three-year moratorium, which would imply no payments until 2023, when President Alberto Fernandez’s four-year mandate expires.
The results of the negotiations would be announced on May 25, the gazette said.
Failure to pay would mean a default, a near doomsday scenario for the cash-strapped country that would prevent the government from seeking credit from financial markets.
Argentina -- in recession for two years -- has also been in lockdown since March 20, further damaging its already battered economy.
The Central Bank has forecast the economy to contract 7.0 percent this year, taking into account two years of recession and the current economic shutdown due to the coronavirus pandemic.