Buenos Aires – Arabs today
After more than three months of difficult negotiations, the Argentine government announced on Tuesday that it had reached an agreement with its creditors to restructure $ 66 billion in debt. The Ministry of Economy said in a statement that Argentina had reached an agreement with the three groups of creditors that were rejecting its offer, speaking of « Great relief 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 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 since April 20 include bonds dating back to 2005 and 2010, which resulted from a previous restructuring as well as new bonds issued in 2016. Buenos Aires in particular has proposed payment of $ 53.5 for every $ 100 of the face value of the bonds. But the creditors asked for $ 56.5. An official source told Agence France-Presse that the new agreement provides for creditors to collect more than $ 54 per $ 100 and improve payment deadlines. Analyst Sebastian Mariel told the French press that this improvement makes it possible to “advance the date of payment without affecting the economic benefits” for Argentina. He added: “The economic issue has been resolved, it remains to be seen details of the legal aspects.”
This agreement is the result of three months of particularly tense negotiations, and after the three groups of creditors announced last week, they rejected Argentina’s offer and threatened to exercise the veto as it represents more than half of the holders of bonds issued under foreign law. Despite the differences, the government and creditors have made clear they want to avoid the consequences of long-term defaults Argentina has in fact been in default since May 22, when it had to pay the $ 500 million interest owed on 3 of the bonds under discussion . Despite the non-payment, the negotiations continued and last week, the South American country defaulted to pay an additional $ 600 million in interest on other bonds subject to restructuring.
Argentina recorded more than 50 percent inflation over the course of a year, while experiencing a record poverty rate. Argentina’s total debt is $ 324 billion, which equals 90 percent of GDP. And suffering Argentine economy Has been in recession since 2018, and will suffer even more this year due to the “Covid 19” epidemic, with GDP shrinking by 9.9 percent, according to the latest forecasts. International Monetary Fund 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. It has another thorny issue of debt issued under national legislation of $ 41.7 billion, and its payments have been deferred until December 31, 2021.
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