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ECONOMY | 12-06-2020 17:39

Argentina extends debt offer deadline as talks start wrapping up

The country will push back the deadline by a further week to June 19, according to a statement from the Economy Ministry.

Argentina has extended a deadline for creditors to accept a debt restructuring proposal for the fourth time as creditors and the government edge toward a deal.

The country will push back the deadline by a further week to June 19, according to a statement from the Economy Ministry.

The government is engaged in talks with creditors to restructure US$65 billion in international bonds after it defaulted on its sovereign debt last month for the ninth time in its history. The government has said it couldn’t make good on its foreign debt obligations, even before the country went into lockdown to slow the spread of the coronavirus.

The latest extension was designed to show that the negotiations are moving forward, and that Argentina and its creditors are closer to a deal, according to a person with direct knowledge of the matter.

The government will improve its debt restructuring proposal in the next “days or weeks” and this will be the final offer, Economy Minister Martín Guzmán in an interview with Brazilian newspaper Valor Economico yesterday.

The country’s CDS Panel said its bonds were given a final value of 31.5 percent in an auction Friday to settle credit-default swaps, triggering a payout of 68.5 percent on the contracts. Argentina has about US$2.2 billion of net notional outstanding CDS contracts, according to JPMorgan.

"Argentina and its advisors intend to take advantage of this extension to continue discussions and allow investors to continue contributing to a successful debt restructuring," the Economy Ministry said in its statement.

Buenos Aires is analysing suggestions "on the different possible ways to improve collections... and maximise investor support, while preserving its debt sustainability objectives," it said.

Earlier, Mexico's President Andrés Manuel López Obrador said he had personally lobbied Larry Fink, chief executive of major creditor Blackrock, to accept the Argentine offer.

He said he had contacted Fink at the request of Argentine President Alberto Fernández.

"He knew I had a good relationship with Larry Fink," the Mexican president told his daily press conference.

"Sometimes these things affect the economic and financial stability of the world, of other countries," said the Mexican president, who did not disclose the date of his discussions.


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