Argentina Near $65 Billion Restructuring Deal With Bondholders
August 03 2020 - 5:10PM
Dow Jones News
By Ryan Dube and Andrew Scurria
Argentina's government is finalizing an agreement with its
biggest private creditors to restructure about $65 billion in
foreign debt and resolve the country's third sovereign default this
century, according to people involved in the talks.
Argentina's biggest creditors, led by BlackRock Inc., agreed to
accept new bonds in return for the debt they currently hold in a
settlement worth nearly 55 cents on the dollar, these people
said.
The tentative agreement came ahead of a Tuesday deadline set by
Argentina for creditors to accept its offer. Officials at the
Economy Ministry and president's office said they couldn't confirm
an agreement.
"There is a handshake," said a foreign creditor involved in the
negotiations. "The big guys caved."
Economy Minister Martín Guzmán recently said the government
wouldn't improve the current offer and would start talks with the
International Monetary Fund on refinancing its bailout from the
lender if there wasn't a deal with bondholders.
"There is nothing to report at the moment," said a government
spokesman.
If a deal weren't reached, Mr. Guzmán told newspaper Pagina12 on
Sunday, the government would wait to return to talks with private
creditors in six to eight months, "but with a deeper restructuring
proposal."
Argentina owes $44 billion to the IMF, which says the country's
debt is unsustainable.
Argentina defaulted in May for the ninth time in its history
when it failed to make a $500 million interest payment.
Latin America's third biggest economy has been mired in a
recession since a 2018 currency crisis as it grappled with
double-digit inflation, one of the world's highest.
President Alberto Fernandez's cash-strapped government took
office in December, pledging to restructure foreign debt that it
says is unsustainable. Argentina's economy has been further hit by
the coronavirus pandemic after authorities implemented a strict
lockdown in March to slow the spread of the virus. The IMF expects
Argentina's economy to contract almost 10% this year.
Alexander Gladstone and Dawn Lim contributed to this
article.
Write to Ryan Dube at ryan.dube@dowjones.com and Andrew Scurria
at Andrew.Scurria@wsj.com
(END) Dow Jones Newswires
August 03, 2020 16:55 ET (20:55 GMT)
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