FILE PHOTO: A pedestrian wearing a protective mask, as a preventive measure against coronavirus disease (COVID-19), passes signs on the street that say “No to paying the debt. Break with the IMF”, in Buenos Aires. Aires, Argentina, May 27, 2020. REUTERS / Agustin Marcarian / File Photo
BUENOS AIRES (Reuters) – The Argentine government reaffirmed on Saturday that it would not give in to its latest proposal to restructure around $ 65 billion in debt, but said it would be willing to negotiate on the fine print of the deal.
The South American country faces a clash with bondholders after creditor groups joined forces to reject the government’s proposal in early July and present their own.
The government has repeatedly said it cannot offer more, although sources told Reuters this week that it would be willing to negotiate key contract terms.
“Argentina wants and will contribute to the development of contractual instruments that improve the success of sovereign restructuring initiatives when they enjoy significant support from creditors,” the economy ministry said in a statement.
The ministry said the counterproposal from the group of bondholders demanded “even more generous financial terms for creditors compared to Argentina’s current offer,” while requesting that Argentina cover the fees and expenses of creditors’ advisers.
“Those aspects of the counterproposal that seek to impose additional burdens on an economy that is drowning in the midst of the COVID-19 crisis … cannot be accommodated,” the ministry said in the statement.
Analysts say a gap of around 3 cents between the parties at the negotiating table should be bridged in late-night talks before the current August 4 deadline for a deal to avoid a messy legal standoff.
Creditors’ lawsuits include modifications to the 2016 deed for the new debt issued in exchange for ‘Macri’ bonds, to prevent the government from using ‘Pac-Man’ style measures to make future changes to any agreement. .
Argentina has been in default since May, the country’s ninth country, and is heading for an economic contraction of 10-12% this year due to the impact of COVID-19, deepening a recession that began in 2018.
Reports by Eliana Raszewski and Jorge Iorio; Written by Dave Sherwood; Sandra Maler’s Edition
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