Around midnight on Thursday the Senate unanimously approved with the votes of 67 of its 72 members the bill to restructure around US$41.7 billion of debt under local jurisdiction on equal conditions to the bond swap for debt under foreign jurisdiction. The bill now awaits approval by the Chamber of Deputies.
The unanimous approval did not exclude acrimonious debate in which each side blamed the other for the increase in debt.
According to the initiative, those creditors who do not accept the invitation to a bond swap will continue to have their payments deferred for the rest of this year and throughout 2021.
The caucus of the Frente de Todos ruling coalition accepted an amendment to the government bill to include a clause recognising for the bondholders under Argentine law the best conditions obtainable in the swap for bonds under foreign jurisdiction, which is still being negotiated, the Senate website revealed.
According to a report published by the Congress Budget office, this bill to restructure US$41.7 billion worth of bonds issued under Argentine legislation implies a relief of almost US$20 billion through to 2030.
The fate of dollar debt under local legislation is one of the points which Argentina must resolve as it negotiates against the clock with the creditors holding bonds issued under foreign legislation totalling around US$66 billion. Argentina is also seeking a new programme with the International Monetary Fund (IMF), which in 2018 approved a stand-by loan of US$57 billion, of which US$44 was remitted.
Argentina’s public debt stands at some US$324 billion, almost 90 percent of Gross Domestic Product.