December 3, 2020

Creditors accuse Argentina of lack of commitment in debt negotiation



Two of the large groups of private creditors with which Argentina is negotiating a restructuring of bonds for $ 66,238 million on Tuesday accused the South American country of “lack of commitment” to reach an agreement.

The Ad Hoc Group of Bondholders (Ad Hoc Bondholder Group) and the Group of Exchange Bond Holders of Argentina (Argentine Exchange Bondholder Group) issued a joint statement in which they assured that there was no substantial progress in the talks in recent years. days, denying rumors in the local press about a rapprochement between the parties.

“Ad Hoc Argentina Bondholder Group and Exchange Bondholder Group want to make clear that there has been no significant commitment between them and the Argentine authorities since June 17, despite inaccurate reports to the contrary,” said the two creditors’ conglomerates, led by powerful investment funds.

On June 17, the negotiations became tense, with cross accusations between the parties, and finally Argentina decided to extend until July 24 the term of adherence to the exchange offer that it launched in April and that is rejected by the majority of the holders. of bonds.

In these little more than two months of arduous negotiations, the Argentine government and large groups of creditors have shortened their differences regarding the net present value of the offer launched in April and the claims for collection expressed by investors in their counter-proposals.

While Argentina’s initial offering was valued at $ 40 for every $ 100 of debt to be restructured and creditors were demanding about $ 60, now the gap has narrowed to about $ 8 at most.

However, as stated by the Argentine Government, the Ad Hoc Group, which has presented joint counter-offers with the Exchange group, is now claiming for legal aspects of the offer, particularly the clauses that would protect creditors in the event of a possible new termination of payments from Argentina, such as the one that occurred in late 2001.

These legal issues on the table seem to have complicated the discussions.

“The lack of serious commitment on the part of the Argentine authorities is deeply worrying, given that time is of the essence and all parties must focus on avoiding the devastating legal and economic costs of prolonged default,” the two groups of creditors warned on Tuesday. .

They assured that “they remain ready and willing to participate constructively to reach a consensual agreement that Argentina and its creditors can support.”

Both groups jointly hold Argentine debt bonds for 21,000 million dollars.

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