Buenos Aires announced that it had reached an agreement to restructure 99% Of its debts Issued in accordance with the provisions of foreign law, amounting to $ 66.13 billion, in a move that culminates in more than four months of arduous negotiations between Argentina and its creditors that would bring the country out of a state of default.
Argentine Economy Minister Martin Guzman said that according to the agreement, “99% of the issued debts have been restructured in accordance with the provisions of foreign legislation.”
This announcement comes less than a month after Buenos Aires announced that it had reached an agreement with three groups of the country’s main creditors to renegotiate the terms of the debt.
Guzmán added, with President Alberto Fernández and Vice President Christina Kirchner standing by his side, that “thanks to the dialogue process there was broad acceptance” of this agreement.
The minister explained that thanks to the agreement reached, his country will receive an exemption from paying $ 37.7 billion in debt, while the annual interest rate will decrease from 7% to 3.07%.
He added, “This gives us a sufficient economic deadline to set sustainable policies that achieve development.”
The minister pointed out that this agreement removed from the country the specter of being prosecuted abroad by speculative funds, a nightmare that it had previously experienced in the past.
In turn, President Fernandez welcomed the agreement, stressing that his country is able to fulfill its obligations contained in it. He said, “We are out of the maze.”
As for the rest of the dollar-denominated debts that are not covered by the agreement, amounting to 1% of the total of these bonds, Matthias Rachnermann, an analyst at Ecolatina, said, “This debt will definitely be repaid. This is a very small amount. $ 600 million is for Argentina practically nothing.” .
Under the agreement, Argentina will pay these bondholders 54.8 cents per dollar, a significant increase compared to the 39 cents it initially offered them.
These bonds represent roughly 20% of Argentina’s total $ 324 billion debt, which equates to 90% of the country’s GDP.
Argentina has been in default since May 22, when it had to pay $ 500 million in interest on these bonds.
The Argentine economy has been in recession since 2018 and will suffer more this year Because of the “Covid-19” epidemic, With the gross domestic product contracting by 9.9%, according to expectations of the International Monetary Fund.
Reaching this agreement will facilitate the negotiations that the government launched with the International Monetary Fund last week to obtain a new loan.
(France Brush)
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