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ECONOMY | 06-03-2023 16:46

Argentina to offer local debt swap to ease default fears

Government will offer investors chance to swap local debt holdings for new bonds in a bid to calm fears of a default.

Argentina will offer investors the chance to swap their holdings of local debt for new bonds in a bid to calm fears of a default over the government's ballooning local debt obligations.

Economy Minister Sergio Massa said that the government will offer investors two swap options to exchange local bonds maturing in the second quarter.

The government seeks to extend the local bond curve until 2024 and 2025, Massa said in a statement broadcast by video.

In his comments, the minister said that the government wants to leave behind the idea that Argentina is always weeks away from default, and that this will clear any uncertainty for 2023.

Argentina has some six trillion pesos (US$30 billion) in local currency debt maturing in the second quarter. As investor uncertainty mounts ahead of presidential primaries in August and general elections in October, President Alberto Fernandez's administration is seeking to swap securities for longer-term maturities to avoid low refinancing rates close to the elections.

Economists from Argentina's main opposition coalition criticised the plan earlier, saying it would only aggravate the fiscal problems of the new administration that will take office in December.

by Scott Squires & Ignacio Olivera Doll, Bloomberg

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