Argentina Open to Extending Debt Renegotiation May 22 Deadline

Argentina’s government is open to extending its May 22 deadline for renegotiating a US$500 million interest payment that if not met would tip the country into default, Economy Minister Martin Guzman said Tuesday.

RELATED:
Argentina Debt Deadlock Remains, Fernandez Says Talks Continue

"There's a great chance the deadline will be extended ... We are in the middle of a negotiation, both sides are working to reach an agreement," Guzman said during a virtual conference with the U.S. Chamber of Commerce and U.S.-Argentina Business Council.

As the 30-day grace period is two days away from expiring, President Alberto Fernandez continues to head the negotiation talks with creditors, extending a new offer after the first one was declined. 

The administration, which inherited the biggest foreign debt since the 1970s from right-wing Mauricio Macri’s government, had proposed a three-year payment hiatus, a major cut to coupon payments and pushing maturities on the bonds included back to 2030 and beyond on the foreign debt.

The main creditors, including U.S. funds BlackRock, Fidelity and T Rowe, rejected the government's offer. The deal is aimed at avoiding a default that would revive memories of an acrimonious, more than decade-long battle with creditors after a major default in 2001.

Last week, creditors Ad Hoc Bondholder Group, Argentina Creditor Committee, and Ad Hoc Group of Argentina Exchange Bondholder also rejected Argentina's debt swap to restructure bonds issued under foreign law for US$66.2 billion, around 22 percent of its public debt. 

The country’s minister of economy said bondholders have since submitted three counter proposals to restructure the debt. Both sides were still having “constructive dialogue,” he added, but they needed to deepen the process of collaboration to reach a deal.

“The sooner this gets resolved, the better,” Guzman continued. “The deal has to be successful for giving Argentina the conditions for being back on its feet and that’s how the process will continue.”