US Banks Pause $20 Billion Argentina Financing package
A planned $20 billion financing package for Argentina from a consortium of US banks-including JPMorgan Chase & Co. (JPM), Bank of America corp. (BAC), and Citigroup inc. (C)-has been suspended, according to a report in The wall Street Journal Thursday. The move comes after Argentina’s recent midterm election results and signals a shift in the approach to supporting the South American nation’s economy.
The financing was initially offered by the Trump administration as a lifeline to President Javier Milei, consisting of a $20 billion currency swap line with the US Treasury and another $20 billion line of credit to be financed by private banks. However, following Milei’s party’s strong showing in the midterm elections, JPMorgan CEO Jamie Dimon indicated the funding “may not be necessary,” suggesting the private sector would be open to considering financing requests if needed. Instead, lenders are now working on a short-term repurchase agreement of approximately US$5 billion, allowing Argentina to exchange an investment portfolio for dollars to cover a $4 billion debt payment due early next year.
The original agreement aimed to bolster Argentina’s economy and support Milei’s administration. The suspension reflects a reassessment of the country’s financial needs and the potential for private sector involvement. Argentina will seek to raise additional funds through bond sales after the initial debt payment, with the repurchase agreement serving as a bridge. The US Treasury Department has not yet commented on the situation.
