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ECONOMY | 22-06-2021 16:26

Argentina plans partial payment to Paris Club, averting default

Government will make a partial payment to Paris Club group of creditors to avert default.

Argentina will make a partial payment to the group of wealthy government creditors known as the Paris Club of an outstanding debt of US$2.4 billion, according to a person familiar with the matter.

The club will spare Argentina from default in the understanding that the country can rework a US$45-billion credit with the International Monetary Fund, said the person, who asked not to be named because the talks are private. The South American nation has used a 60-day grace period to try to reach an agreement with the group after failing to make the payment by May 31.

The Economy Ministry press office and the Paris Club secretariat didn’t immediately reply to a comment request. Economy Minister Martín Guzmán is expected to give a press conference on the topic in Buenos Aires, initially scheduled for 3pm.

Argentina’s global bonds due in 2030 pared an intra-day decline to trade at 37.23 cents on the dollar on the news.

President Alberto Fernández’s administration is seeking to avoid a damaging default so it can refinance this debt after reworking a deal with the IMF, which is already taking longer than initially expected. Germany, Japan, the United Kingdom, the United States, Italy, Spain and Canada are among the 16 creditor countries on this deal.

Argentina has requested nine credit lines to the Paris Club since 1956.

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by Jorgelina do Rosario, Bloomberg

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