Argentine creditors are calling for immediate negotiations to reschedule their debt

Buenos Aires – (dpa)


Published in :
Friday, May 22, 2020 – 11:22 PM
| Last updated :
Friday, May 22, 2020 – 11:22 PM

A major group of Argentine creditors called on Buenos Aires on Friday to enter into “direct and immediate discussions between the parties” to reach an agreement to restructure the debt and to prevent the country from slipping into a default of the ninth time.

The Ad Hook Bond Bonder Group, which consists of international asset management institutions and owns about $ 17 billion in international bonds for Argentina, said the country’s current proposal to restructure $ 65 billion in foreign debt would require the bondholders to “incur disproportionate losses.”

The group issued the statement after Argentina extended the deadline for negotiations to restructure its debt from Friday to June 2.

According to local media, the government of President Alberto Fernandez said it will not pay $ 503 million in bond interest service that was due to be paid on Friday.

“Although Argentina’s inability to pay such interest will result in defaults in various bond issues, the group understands that Argentina has expressed its intention to deal with creditors within the next week to try to find a comprehensive solution,” the bondholders said.

Creditors reject Argentina’s offer, which includes a three-year moratorium, a cut in interest payments by 62 percent and a reduction of 5.4 percent in major payments.

The bondholders group said it had submitted a counter-proposal “that will provide the country with a significant facility of liquidity and will remain consistent with the overall financial path prepared by the government.”

The group complained that, over the past month, “Argentina has not actually entered into any real engagement with its creditors.”

South America’s second largest economy was already facing a severe crisis, before the Covid-19 epidemic. Inflation is more than 50 percent, and the International Monetary Fund expects the economy to contract by 5.7 percent this year.

Argentina suffers from a flabby government apparatus, low industrial productivity and a large shadow economy that deprives the country of tax revenues.

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