05/22/2020 - 10:22
Already in default territory, although without lawsuits and with the agreement to maintain the negotiations, the Economy Minister, Martín Guzmán, confirmed this Friday that the country will improve the offer to bondholders to "reach a sustainable agreement."
Speaking to Reuters, the minister assured that " the negotiations continue on a path that we consider positive " and said that his vision is that there is a greater mutual understanding between the two parties.
In any case, he clarified that “there is still an important distance to cover, but all parties are at the table to find a solution. For Argentina, it is the essence that the agreement is aligned with the country's payment capacity ”.
“The reason why we extended (the term of) the offer is technical. We are planning to make modifications with the aim of reaching a sustainable agreement with our creditors, ”said Guzmán.
This Friday the extension of the Argentine offer for the exchange of sovereign debt for US $ 68,842 million expires. The economy ministry will ask the SEC - the stock market regulator - for a 10-day extension. In that time, he hopes to reach an agreement with the bondholders.
Precisely this Friday, the Ad Hoc Group of Bondholders, which advises White & Case and is led by international funds such as BlackRock, Ashmore and Fidelity, among others, celebrated the extension of negotiations, but claimed that the Argentine Government a month ago it has "no material communication" with its creditors. And he asked for a "direct and immediate discussion between the parties."
"Although Argentina's failure to pay such interests will result in defaults in the various bond issues, the Group understands that Argentina has expressed its intention to speak to creditors over the next week to try to find a comprehensive solution." they claim.
Despite mentioning the fact that this Friday Argentina will default on a payment of 503 million dollars, they maintain that they are willing to continue negotiating, implying that they will not activate, for now, the judicial route.
Larry Fink, executive director of the Blacrock fund, the toughest in the negotiations.
"The Group welcomes the fact that Argentina has expressed an intention to work with creditors, but the actions speak louder than the words. During the last month, Argentina has had practically no substantial communication with its creditors, " they claim.
Argentina launched its debt swap offer on April 21, with an original maturity of May 8. Later, it was extended until May 22. Now, it extends to June 2. The "Results Announcement Date (as defined in the Prospectus Supplement) will be June 3, 2020 or as soon as possible thereafter, and the Execution Date, the Effective Date and the Date of Liquidation, as defined in the Prospectus Supplement, will be on June 8, 2020 or as soon as possible thereafter, "Economy said in a statement.
Until now, the number of creditors that entered the swap is unknown. The market estimate is that it is between 13% and 17%. In Economics they think they are closer to a settlement than a few weeks ago. The creditor groups let it be known that they may lower some of their aspirations if Argentina improves its proposal.