Argentina plans to extend debt deadline until May 22

Bloomberg

Argentina extended the deadline to its debt offer to May 22, the government said in a resolution published in the Official Gazette on Monday.
The previous deadline was May 8 and the extension means results will now be announced on May 25 and liquidated on May 27, according to the resolution. Bloomberg reported the plans to prolong the deadline on Sunday.
The extension is part of President Alberto Fernandez’s next steps in its debt restructuring after extending a deadline over the weekend for creditors to accept an initial offer to exchange $65 billion in overseas bonds.
Days before the original deadline, the country’s three largest creditor groups had already rejected the terms of the offer, which asked bondholders to take significant losses on interest and set a three-year grace period before any payments are made.
“We continue to dialogue in good faith with creditors with the aim of reaching a sustainable agreement,” Fernandez said in an earlier tweet.
The May 22 deadline also takes place when about $500 million of delayed interest payments come due. Failure to reach an agreement or pay the cash by that date would result in a default. Argentina has won the backing of the International Monetary Fund and academics including Joseph Stiglitz and Jeffrey Sachs and insisted that even before the coronavirus pandemic began wrecking its economy, it was unable to pay what is owed.
The extension would allow time for more talks with the creditor groups that had rejected the initial proposal, saying it stuck debt investors with unfair losses. The bonds had edged higher last week on hopes the parties were getting closer to a deal, but still trade at deeply distressed levels near 30 cents on the dollar. To close the deal, the South American nation needs the support from creditors owning at least two-thirds on some of the outstanding bonds’ face value.

Economy Minister Martin Guzman said May 6 the country is open to tweaking the exact terms of the offer, as long as it leaves Argentina with a sustainable debt burden.
A spokesman for the Economy Ministry didn’t immediately respond to a request for comment sent after official work hours.
The Province of Buenos Aires, which has followed the national government in submitting a proposal to rework $7 billion of its foreign debt, has also given creditors until Monday to accept its initial offer. The province’s creditor group has planned the proposal, saying the deal represents a 60% loss to bondholders.
The South American country, which resolved its previous default just four years ago, failed to rebound under Mauricio Macri, the market-friendly former president who was voted out of office last year. The agriculture powerhouse is poised to contract for a third-consecutive year in 2020 and is battling with a widening gap between its official and unofficial exchange rates due to capital controls and annual inflation that’s still hovering above 48%.