Paula Lugones
02/20/2020 - 13:07
- Clarín.com
- Economy
The International Monetary Fund called on private creditors to think of an "appreciable contribution" in the renegotiation of their debt to Argentina and Wall Street came the message without much surprise and with some resignation. The bondholders see a take away inevitably and, according to experts consulted by Clarín , are willing to make concessions.
Hans Humes is one of the leaders and spokespersons of private creditors who will renegotiate the debt with the Argentine government. He has experience in the subject, since he was co-chair of the Global Bond Committee of Argentina after the default of 2002. Also in the restructuring of Greece's debt. Founder and president of Greylock Capital, said that "private creditors are willing to make concessions in the same way as the IMF."
Humes added that “the Fund and private creditors will have to work with Argentina to provide sufficient relief based on net present value to allow the Argentine government to cover the basic social needs of its populations. In fact, we are not surprised by the IMF statement, but we would have welcomed more analytical data that could be the basis for seeing what gaps exist and how creditors can help close those gaps. ”
Since the beginning of Alberto Fernández's management, bondholders have been demanding details about the economic plan and fiscal, growth and inflation goals in order to evaluate Argentina's future payment capacity and thus evaluate a future offer. This was claimed in person to Minister Martín Guzmán when he was in New York at the end of January.
On what kind of remover he thinks possible, Humes said: “We will see what is presented. It is essential that Argentina and the Province of Buenos Aires seek financial advisors to put this crisis in the proper context of how things have been handled in other countries. Minister Guzmán has a sophisticated understanding of debt problems. What is necessary is that there is someone with complementary pragmatic skills to advise. Many of the creditors involved in this process have gone through more complicated situations than Argentina now has. ”
“When there is a collaborative process, based on a solid economic plan that promotes growth and reduces poverty, I am sure we will find a solution that works. The issue of capital cuts or interest concessions are just different options that should be negotiated when a more formal process begins, ”he said.
And he gave an example: “ In the case of Greece, we accept a 53.5% discount . The official sector negotiated a reduction in net present value that was similar, but it was with extremely long maturities and interest rate reductions. ” Humes, however, clarifies that our country "is not close to the situation in which Greece was or frankly where Argentina was in 2001".
Jorge Piedrahita, CEO of Gear Capital Partners , said that "it is Argentina who must make a proposal, which must be agreed with the IMF if the agency is requested to extend the capital maturities in the coming years."
For the expert, “ a take away in present value is inevitable. It must be a combination of factors: reduction in interest coupons, extension of capital maturities and removes the principal due, ”he said, and understands that the significant contribution that the agency is asking from bondholders “ implies a withdrawal of more than 50%, although prices in the secondary market are already assuming that cut ”.
Piedrahita believes that “the IMF naturally supports the position of Minister Guzman, but this is usual for the entity at this stage. There is no clarity about what the official asks the IMF, whether an Extended Facility program or another Stand by ”.
And highlights the political framework of the negotiation: “ US support is key, but Alberto Fernández's foreign policy or Cristina Kirchner's comments do not help to achieve political support from the Trump administration. It is not clear that they will have that support. ”