Argentina did not pay its creditors on Friday, so it formally went into suspension of payments. The State has left its creditors 503 million dollars of interest on three global bonds that were due yesterday, without paying its creditors, so it has entered into ‘default’, although it will continue to negotiate with them. It will, as he said, until June 2.
On Thursday the Government of Argentina announced an extension of the negotiations with its foreign creditors until June 2 to face the payment of the debt, valued at a little more than $ 66,238 million. This was confirmed by the Ministry of Economy in a statement, shortly before the expiration of the first term given to the Argentine State to pay the aforementioned 503 million of the Global AA21, AA26 and AA46 bonds that it finally did not pay.
However, keeping the negotiations open has allowed the default to be considered by the markets as a ‘technical default’ or ‘soft default’They take for granted that the country has the willingness to make a pact of debt restructuring that satisfies the majority of the capital represented by the different investment funds.
President Alberto Fernández’s executive presented a month ago an offer to the SEC, the US Securities and Exchange Commission, an offer with the exchange of a capital reduction of 5.4% and a 62% reduction in interest, in addition to a three-year moratorium before starting payments.
According to sources close to the Minister of Economy, Martín Guzmán, quoted by the Argentine newspaper ‘La Nación’, the Government would consider that falling into ‘default’ “would be an excess”, since both parties “are aware” that the new extension is a new extension of the previous offer. “What is going to be published is the extension of the offer that expires. The dialogue is still open and depending on its result will be the next steps,” the sources told this Argentine newspaper.
For its part, the Ministry of Economy has released a statement explaining that the Government “continues to receive opinions and suggestions from investors about different paths” to take, so “it is analyzing these suggestions to maximize investor support, preserving at the same time its debt sustainability goals. “
“Argentina firmly believes that a successful debt restructuring will help stabilize the current economic condition, alleviating medium and long-term restrictions on the economy, “explained the Ministry’s text.
Debt restructuring has been one of the priorities of the Fernández government since he assumed power on December 10, after the crisis unleashed in 2018, where Argentina was on the brink of cessation of payments.
The former Argentine President Mauricio Macri asked the International Monetary Fund (IMF) a megacredit of $ 56.3 billion, of which only about $ 44 billion was received after Fernández, after assuming the head of state, decided to reject the remaining loans since they were used without control by the old government and intended to “finance capital flight. “