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ECONOMY | 28-05-2020 23:36

Creditors submit new debt offer as deadline draws closer

Two bondholder groups jointly submit proposal that focuses on providing the country with front-loaded cash flow relief in excess of US$36 billion over nine years.

Two of Argentina’s largest creditor groups sent President Alberto Fernández’s government a new counter-offer in an effort to break the deadlock over a US$65-billion restructuring deal before a June 2 deadline.

The Ad Hoc Bondholder Group, represented by White & Case LLP, and the Exchange Bondholder Group jointly submitted a proposal that focuses on providing the country with front-loaded cash flow relief in excess of US$36 billion over nine years, the Ad Hoc Bondholder Group said in a statement Thursday.

That group features some of the nation’s biggest bondholders, such as BlackRock Inc, Ashmore Group Plc and Fidelity Investments. The exchange creditor group includes Monarch Alternative Capital LP, HBK Capital Management and VR Capital Group Ltd.

Argentina is in the middle of talks with its largest creditors after formally defaulting for the ninth time in the nation’s history last week. The Fernandez government extended its deadline for a debt deal after the default, giving the two sides several more days to reach an accord.

“The joint proposal has been specifically designed in good faith to meet the macro-fiscal objectives expressed by the government, and represents a considered and responsible initiative by international asset managers who have invested in Argentina on behalf of millions of savers around the world,” the Ad Hoc Bondholder Group said.

Argentina is burdened by inflation near 50 percent and an economy that was shrinking even before the pandemic hit. The government has said the country needs US$40 billion in debt relief to set it back on the path to sustainable growth and officials have been in talks with bondholders for more than two months.

by Ben Bartenstein & Jorgelina do Rosario, Bloomberg

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