Mary Church
07/06/2020 - 10:37
- Clarín.com
- Economy
- Economy
The Argentine government presented a debt offer to the bondholders, the fourth informally in the negotiations, in which the improvement in the average value reaches 37 % when compared to the original on April 22.
However, yesterday the team of the Minister of Economy, Martín Guzmán, publicized the main points of the changes that the exchange offer that he will make official and that, once again, highlighted that it is the last and the “maximum effort” that he can make Argentina.
The key points of this new offer are:
- Accrued interest accrued : unlike the first offer, in which it will become official today, the interest generated since April 22, the expiration date of the Globales that marked the first non-payment from Argentina, and those of all the securities that generate them until September 4. A bond maturing in 2030 is delivered, paying interest semi-annually.
- Grace period : while in the first offer it was proposed to start paying interest only in 2023 (an idea that from the market was resisted and they even said that it implied that practically the current Government did not commit to making any payment), with the proposal They are currently being paid at the negotiating table in September 2021. They will be held every six months, on March 4 and September 4 of each year, starting in the latter part of 2021.
- Withdrawal of capital and interest rate: Another point in question is the change in the withdrawal of capital, which started between 12% and 5% in the original proposal (depending on the case of shorter bonds, for the first case, and medium and long maturity, in the second) to a much lower maturity than what is discussed today: 3% and 1.5%, respectively. Also the offered interests were modified. The simple average of the first offer was 2.9%, when now 3.5%. In the latest counterproposals, the bondholder groups ask for a little more, 3.9% (in the Creditors Committee, those closest to the Government) and 3.6% from Ad Hoc, where the hardest fund is. , BlackRock.
- Debt relief : from the beginning of the negotiations, Guzmán stated that Argentina's proposal had to be within the parameters of sustainability. Even at the request of the Government, the International Monetary Fund issued two technical notes in which it supported Alberto Fernández in the restructuring process and called for debt relief of between US $ 55,000 million and US $ 85,000 million. The original Argentine proposal raised a relief of US $ 64.7 billion, a number that was compressed to US $ 50.4 billion , according to private calculations made based on what was presented by the economic team yesterday. This number is in line with that proposed by the Creditors Committee, which presented a plan with a relief of US $ 50.8 billion and is slightly higher than that of Ad Hoc, which raised one of US $ 47.7 billion.
- Prize for those who “vote” them : debt creditors under foreign law who choose to enter the swap will receive an extra for doing so. On the other hand, the others, who will later end up entering but not by choice but dragged by the majority, will not have it. As established by the collective action clauses (CAC), known as "antibuitres", there is a percentage of each series of bonus that if it is exceeded in accessions, all the rest must enter. Added to this is the general "minimum acceptance threshold", of which the number set by the Government is not yet known. Once this margin is exceeded, the payment of the "extra" to those who accepted the exchange is activated. Thus, the former receive a value of around $ 53.3, while the latter get $ 52.2. With this approach, the “PACMAN strategy” that the government had presented in the original version is mitigated. Another point is that the bondholders who have titles issued in the previous exchanges (from 2005 and 2010) are recognized the contracts in force at those times, with stricter conditions for the country.