Mary Church
06/11/2020 - 18:09
- Clarín.com
- Economy
- Economy
The Government is working to present the new offer to bondholders and to the United States Securities Commission (SEC), which, according to sources with knowledge of the negotiation, could still be above the limit guaranteed by the International Monetary Fund (IMF).
Last week the IMF issued a technical note, at the request of the Argentine government, in which it endorsed the proposal that Martín Guzmán presented informally (not before the SEC), which brought the value of the offer to about 47 cents , and marked that there was a “limited margin” to improve it.
What he hinted was that a proposal of up to about 50 cents was within the expected range, according to the evolution parameters of the Argentine economy and also how the country was going to finance itself in the coming years.
However, to the offer around that value that was being put on the table, the Government kept the letter of the "sweetener" : add the coupon tied to exports (for which the moving average will be taken into account of five years).
When all the elements that come into play in the proposal are added, that is, the bonds, running interest and the coupon tied to exports, for example, the value of the offer would reach 52 dollars of net present value , assured a source aware of exchanges. The counter-offers presented by the bondholders were around US $ 55
Upon reaching this value, the Government seeks to add adherence to the proposal that got a meager accompaniment with the numbers at the end of May: adherence did not reach 20%, it is discarded in the market. The government has never released results yet, with negotiations still underway.
The countdown of this renegotiation of the debt under foreign legislation, for US $ 64.8 billion, would be coming to an end: the deadline imposed for today, June 12, is known to be extended, either by a new request for an extension or because, once the amendment to the proposal is filed with the SEC, there must be a minimum of 10 days for bondholders to define whether or not to adhere.
This Friday afternoon the confidentiality agreements (NDA) expire that were signed by all the groups of creditors last Tuesday. The fact that everyone sat down again was taken as a positive step in the negotiation from the Government. It is not ruled out that, if negotiations continue, this pact between Guzmán and the bondholders will also be extended.
In the final stretch of the exchanges, the Nobel Prize in Economics and professor at Columbia University, Joseph Stiglitz (he was Guzmán's mentor) again gave another boost in the renegotiation. He defined that debt creditors “are not ashamed; some even pretend to be good corporate citizens. ”
"Now we understand the importance of sustainability. Unfortunately, the private sector is short-sighted and does not see it, "he said.
Although Alberto Fernández had said yesterday that he was going to meet Guzmán to give work on the final details of the offer, that meeting has not yet happened.
In the event that Guzmán's offer exceeds 50 cents, Argentina must manage to refinance all the debt with the IMF for a significant term , of around 10 years, according to what is known so far.
But that will be known in another chapter of the debt, once the leg that makes the obligations with the private sector is finished. “You have to go one villain at a time; the best Batman movies weren't multi-villains, ”an official source joked days ago.