Argentina expires its creditors to accept the debt rescheduling offer


Saturday 9 May 2020 03:00 AM

A window into the world The deadline set by Argentina to propose restructuring its debt ended without any immediate clarification
If the international creditors supported the proposal, according to the Tilam News Agency.Financial market experts said there was an “important level of acceptance” in Argentina’s offer, but there was no information on the position of the investment funds, which would determine the outcome.

The Argentine government has said that it is open to dialogue, and believes that the negotiations will continue until Friday.

The offer to reschedule about $ 65 billion, representing the value of treasury bonds, aims to postpone payments for a period of three years and write off 62% of the interest value and 5.4% of the value of the basic installments.

It is noteworthy that Argentina is already suffering from an acute economic crisis before the outbreak of the Corona virus (Covid 19) hit the economy as well.

The inflation rate in the country exceeds 50%, and the International Monetary Fund expects the economy to contract at a rate of 5.7% of GDP during the current year.

The government says that more than 20% of its revenue can go to debt installment service, which makes it impossible for it to meet its obligations to creditors.

Three groups of Argentine creditors rejected the latter’s offer to reschedule the debt. Creditors said the plan would incur disproportionate bondholders.

The creditors said, in a joint statement issued last Monday, that “each of the three groups of bondholders, and the institutions they represent with the rest of the other investors, wish to confirm that they cannot support Argentina’s latest debt swap offer.”

The creditors added that they considered “the conditions that Argentina wanted incurred by them to be disproportionate and unjustified and unnecessary losses”, but added that they wanted to reach “an acceptable solution to the financial challenges the Republic is currently facing.”

The three groups of creditors, which represent Argentina’s largest creditors, include BlackRock, Fidelity, GreyLock Capital and Ashmore.

But 138 economists from 20 countries, including Nobel Prize-winning economists Joseph Stiglitz and Edmund Phillips, backed Argentina’s proposal as “reasonable” and properly reflected the country’s ability to pay.

Source: Constitution


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