The province of Buenos Aires, the most populous and wealthiest district in Argentina, followed in the footsteps of the national government and also extended the negotiation period with creditors to restructure its debt issued under foreign law for 7,148 million dollars.
The province, governed by the pro-government Axel Kicillof, extended the period of negotiations that expired this Tuesday until June 5, three days after the deadline set by the national Executive to exchange sovereign foreign debt for 66,238 million dollars.
“This new extension responds to the continuity of the good faith conversations with the holders of eligible titles in the province who have not yet accepted the proposal and to the willingness of the provincial government to move towards an overcoming solution that will maximize acceptance and preserve the at the same time the sustainability objectives already externalized, “the provincial government reported in a statement on Monday.
The province of Buenos Aires has been in selective cessation of payments since mid-May, after failing to meet a debt maturity of 110 million dollars, although the Buenos Aires authorities allege that this does not prevent the negotiations from continuing since the titles whose payment is has failed to comply are part of the restructuring proposal.
The Buenos Aires offer proposes a 7% capital drawdown and a three-year grace period, that is, to start paying in 2023.
The head of the Buenos Aires Cabinet, Carlos Bianco, affirmed today that he has “positive expectations” of reaching an agreement with the creditors.
The exchange proposal launched by Buenos Aires at the end of April “is absolutely reasonable and is in complete harmony with the offer made by the national government,” the official said in statements to Radio 10.
The Government of Buenos Aires warned that efforts to contain the transmission of the coronavirus pandemic “have led the province to a situation of greater fragility in fiscal terms than expected at the beginning of this process” and “this situation has further limited the margin to devote resources to the payment of debt services during the first years. ”
“In this context, it is essential that the solution we jointly arrive at preserves sufficient space to implement policies aimed at reactivating the economy and generating payment capacity in the coming years,” the provincial executive proposed.
The province of Buenos Aires, together with the Argentine capital, have become the main sources of contagion for COVID-19, since they concentrate almost 80% of all people infected with coronavirus in the country.
Rating agencies have lowered in the last weeks the notes of Buenos Aires and other Argentine provinces due to their financial and economic difficulties, in tune with the deepening of the recession that Argentina has been going through for two years due to the pandemic.