US Banks Pause $20โข Billion Argentina Financing package
A planned $20 billion financing package for Argentina from a consortium ofโค US banks-including JPMorganโข Chase & Co. (JPM),โฃ Bank of America corp. (BAC), and Citigroup inc. (C)-has beenโ 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 โขthe South American nation’s economy.
The financingโ was initially offered by the Trump administration as a lifeline to President Javier Milei, consisting of aโค $20 billion currency swap โขline โขwith the โUS Treasury and another $20 billionโ line โคof credit to be financed by private banks. However, following Milei’s party’s strong showing in the midterm elections, JPMorgan CEO Jamieโค Dimon indicated the funding “may not be necessary,” suggesting the โprivate sector would be open to considering financing requests if needed. Instead, lenders are now working on a short-term โฃrepurchaseโ agreementโข of approximatelyโข US$5 billion, allowing Argentina to exchange an investment portfolio for dollars โto cover a $4 billion โคdebt payment due โearly next year.
The original agreement aimed to bolster Argentina’s economy and supportโ Milei’s administration. The suspension reflects aโ reassessment of the country’s financial needs and the potential for private sector involvement. Argentina will seek to raise additional funds throughโ bond sales after the initial debt payment, with the repurchase agreement serving as a โbridge. The US Treasury Department has not yet commented on the situation.
