Argentina plans to extend maturities of international bonds, IMF debt

Record ID: 1429220

  • Title: Argentina plans to extend maturities of international bonds, IMF debt
  • Date: 29th August 2019
  • Summary: BUENOS AIRES, ARGENTINA (FILE - AUGUST 11, 2019) (REUTERS) ***WARNING: CONTAINS FLASH PHOTOGRAPHY*** VARIOUS OF PRESIDENT MAURICIO MACRI AT RALLY AFTER RESULTS OF PRIMARY ELECTION WERE ANNOUNCED VARIOUS OF CENTRE-LEFT CANDIDATE ALBERTO FERNANDEZ VOTING
  • Embargoed: 12th September 2019 02:09
  • Keywords: IMF Argentina Treasury Minister Hernan Lacunza debt Buenos Aires President Mauricio Macri
  • Location: BUENOS AIRES, ARGENTINA / WASHINGTON, D.C, U.S.A.
  • City: BUENOS AIRES, ARGENTINA / WASHINGTON, D.C, U.S.A.
  • Country: Argentina
  • Topics: Government/Politics
  • Reuters ID: LVA008AU4WPC7
  • Aspect Ratio: 16:9
  • Story Text:Argentina will negotiate with holders of its sovereign bonds and the International Monetary Fund to extend the maturities of its debt obligations as a way of ensuring the country's ability to pay, Treasury Minister Hernan Lacunza said on Wednesday (August 28).
    At a news conference after meetings with an IMF team visiting Argentina, Lacunza said the government would "re-profile" the maturities of debt owed to the IMF under a $57 billion standby agreement.
    Interest and principal payments on bonds issued under international and local law will not be altered in the re-profiling. The changes in maturities would be aimed at obligations held by institutional, rather than individual investors, he said.
    The peso took a beating during the day, even though the central bank heavily intervened in the foreign exchange market for a second consecutive day.
    Argentine asset prices have been slammed since the Aug. 11 primary election showed business-friendly President Mauricio Macri has surprisingly little public support in his campaign to win a second term in the October general election. He was trounced in the primary by centre-left Peronist challenger Alberto Fernandez, who is now the clear front-runner.
    Argentina's peso closed 3.1% weaker at 58.1 per dollar on Wednesday, even as the central bank sold $367 million of its reserves in a second consecutive day of heavy intervention aimed at controlling the peso's fall.
    Worries over Argentina's ability to meet its dollar-denominated debt obligations have increased since the Aug. 11 primary. The peso has lost almost 22% of its value against the U.S. dollar since then. The weakness of the currency has inflamed market concerns about Argentina's ability to pay its dollar-denominated obligations.
    Changes in the maturities of short-term debt, known as Letes and Lecap, will be between three and six months, Lacunza said.
    He said changes in maturities of bonds issued under Argentine law would require approval from Congress.
    The IMF said in a statement that it was analysing the government's new debt plan. Argentina has taken "important steps" to address liquidity needs and safeguard reserves, said the statement from IMF spokesman Gerry Rice.
    The central bank issued a statement saying it would continue to implement a "restrictive monetary policy" and continue intervening in the foreign exchange market to bolster the peso.
    The pushing out of debt maturities was aimed in part at preserving the central bank's dollar reserves, which stood at $57.9 billion as of Aug. 26.
    (Production: Juan Bustamante)
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