November 29, 2020

The Argentine president says that the negotiation continues: Nobody wants a “default”



Argentine President Alberto Fernández assured this Saturday that he will continue negotiating with creditors for the restructuring of the public debt issued under foreign law for some $ 66,239 million, despite the fact that the initial term expired on Friday, because “nobody wants to fall in ‘default’ “(cessation of payments).

“The negotiation continues, nothing is closed, it continues,” said the president in an interview with Futuröck radio in Buenos Aires.

Fernández reported that he will meet this Saturday with the Minister of Economy, Martín Guzmán, to analyze “how many accepted the offer” and anticipated that he had news that “there may be counter-offers”, so he opened the possibility of the deadline being extended negotiation with private creditors to avoid going into default.

The government is expected to announce in the next few hours the results of the debt restructuring offer, which according to private analysts was well below official expectations.

According to the offer filed on April 22 with the United States Securities Commission (SEC), creditors had time until 5:00 p.m. New York time (9:00 p.m. GMT) last Friday. to agree, but in the same prospectus of the offer Argentina reserved the possibility of extending the term.

FERNANDEZ DEFENDS HIS OFFER

“Nobody wants to fall into ‘default. We do not want to fall into’ default ‘so much that we make an offer not to fall into’ default ‘,” the Argentine president said.

Fernández defended Argentina’s offer to its creditors, noting that “objectively, creditors do not lose, they only earn less in a world that has turned around.”

The proposal launched three weeks ago by Argentina aims to redeem 21 titles nominated in US dollars, euros and Swiss francs and divided into two large groups: those issued with the 2005 swap and its reopening in 2010 and those placed since 2016.

Argentina asks creditors for a three-year grace period, that is, to start paying recently in 2023, with an initial rate of 0.5%, which would gradually increase to an average interest rate of 2.33% and a maximum rate of 4.875%.

The proposal involves reducing the principal by $ 3.6 billion, which is equivalent to a deduction of 5.4% on the stock owed, and the interest by $ 37.9 billion, which is equivalent to a 62% interest deduction.

Argentina offers creditors ten new types of bonds, in dollars and euros, maturing in 2030, 2036, 2039, 2043 and 2047.

“The capital that is owed to them is practically intact, because only 5% of that capital is affected; in the interests, one says that the deduction is substantial because the average interest rate of the total bonds that are being reprogrammed gives plus or minus 7 points and we are lowering it to an average of 2 points. So they say ‘no, I lose 5 points of interest’, and yes, it is true, but I pay you 2% in a world that pays zero. you’re offering is that they earn less, not that they lose, “explained the president.

Fernández assured that he defends “very firmly” the Argentine proposal because it was elaborated with “seriousness”.

“Also this time we have a kind of endorsement from the main auditor of international finances, which is the Monetary Fund (International, IMF) and the truth is that our proposal keeps 100% the sustainability criteria that the Fund has proposed, so that I hope this time will understand and join us, “said the president.

MULTIPLE FRONTS

The Peronist politician assumed the presidency last December and received from the conservative Mauricio Macri (2015-2019) a highly indebted country, in recession since April 2018, with high levels of inflation and deteriorating social indices, a complex scenario to which this was added year the coronavirus pandemic.

“Sometimes I feel like a chess player, the great masters who do the simultaneous ones, who play 20 games at the same time. I feel that I jump from debt to bonds, from bonds to a pandemic, from a pandemic to education, from education for retirees, is what touched me in luck, but this is how we are working, “revealed Fernández.

The president, however, was confident: “We have a wonderful opportunity to make a fairer, more balanced world, this world that concentrates wealth among very few and condemns the rest to poverty is worth nothing. It is not about making a system but a more balanced system, with more social justice. “

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