Argentina extends confidentiality agreements with creditors as talks continue

The government extended existing confidentiality agreements with its creditors on Tuesday for 24 hours, as talks on its bid to restructure more than US$65 billion in debt set to go down to the wire.

With the deadline for a deal due on Friday, talks are now entering a crucial stage, officials said.

"The agreements extend until Wednesday at 17.30 hours New York time," a government source told the AFP news agency.

Argentina signed confidentiality agreements with its largest creditors as it sought to negotiate the conditions of its debt swap deal behind closed doors. Those agreements expired on Tuesday, after which the Economy Minister Martín Guzmán announced that he would present the new offer to bondholders, after rejecting an earlier proposal on May 8.

Details of the new offer have not been released. A report in Perfil on Tuesday evening said that the government's new offer would likely be presented on Friday, with the deadline extended until Monday, while Guzmán was quoted as saying "negotiations continue."

The deadline to join the bond swap expires on Friday, the official source assured. But that date can also be postponed, as has happened on at least three previous occasions.

Argentina, which went into default on May 22 after missing payments, is working to improve its initial offer, which included a three-year grace period, a 62 percent reduction in interest and 5.4 percent in capital.

According to reports in the local press, the new debt swap proposal will raise bond yields to a level of around 50 percent of their face value and include a coupon tied to agricultural exports levels. Farmers, however, are lobbying against that move.

Argentina's total public debt stands at around US$ 324 billion, almost 90 percent of its GDP.

President Alberto Fernández and Minister Guzmán have repeatedly insisted that any deal must be “sustainable” and not mortgage Argentina’s future. 

– TIMES/AFP