BA Province surprises with plan to pay bond, and then restructure
Axel Kicillof declared that the province will use its proper resources in order to realise a US$250 million bond payment to avoid default. The Governor looks to reassure creditors about Buenos Aires ability to honour its debt.
Argentina’s biggest province surprised creditors by saying it will make a US$250 million bond payment to stave off a hard default after it failed to gather enough support from investors for a delay.
Buenos Aires province will use money from its coffers to make the principal payment, Governor Axel Kicillof told reporters in the city of La Plata, days after insisting his government didn’t have the necessary funds.
The province will then start the process of restructuring its foreign-currency debt, in tandem with the national government’s efforts, Kicillof declared.
The announcement assuages concerns that Buenos Aires will enter a tumultuous default this month amid a nationwide economic crisis and a plunge in the value of the peso.
Investors have been viewing moves by Kicillof, a former economy minister, and his treatment of creditors as a first test as President Alberto Fernandez formulates his own strategy for seeking debt relief from both private bondholders and the International Monetary Fund.
“The province always sought to find a constructive solution in good faith,” Kicillof told reporters.