The Argentine government announced on Tuesday that it has reached an agreement with its creditors to restructure $ 66 billion of debt.
The agreement comes after more than three months of difficult negotiations.
In a statement, the Ministry of Economy said that Argentina reached an agreement with the three groups of creditors that were rejecting its offer, speaking of “great satisfaction” for the country, while the negotiation deadline expired on Tuesday at 21:00 GMT.
The statement said that “Argentina will amend certain payment dates” compared to the original offer of the government, and this includes payments in January and not in March of each year as originally planned.
At the end of last July, the three groups of creditors – Exchange Bondholders, ADH Hook and the Argentine Creditors Commission – rejected the proposal of President Alberto Fernandez’s government to restructure.
Discussions, which have been ongoing since April 20, include bonds dating back to 2005 and 2010 that have resulted from a previous restructuring as well as new bonds issued in 2016.
In particular, Buenos Aires proposed paying $ 53.5 for every $ 100 of the face value of the bonds. But the creditors asked for $ 56.5.
An official source stated that the new agreement stipulates that creditors collect more than $ 54 per $ 100 and improve payment deadlines.
This agreement is the result of three months of particularly tense negotiations, and after the three creditors’ groups announced last week they rejected Argentina’s offer and threatened to veto it as it represented more than half of the holders of bonds issued under foreign law. Despite the differences, the government and creditors have made clear that they want to avoid the consequences of long-term default.
Indeed, Argentina has been in default since May 22, when it had to pay a $ 500 million interest on three of the bonds under discussion. Despite the non-payment, negotiations continued.
Last week, the South American state defaulted on paying an additional $ 600 million in interest on other bonds that are subject to restructuring.
Total debt of Argentina is $ 324 billion, which equals 90% of GDP.
The country must also negotiate a new program with the International Monetary Fund, which requested a loan of $ 57 billion, of which 44 million was disbursed.
–
