Argentina

YPF SA, Argentina’s state-run oil driller and refiner, looks set to avoid a costly default next month after it won support for a debt swap from a large creditor group, Bloomberg News reported. The so-called Ad Hoc Bondholder Group, which holds 45% of YPF’s 2021 notes, expressed support for the exchange after the company increased its cash sweetener over the weekend, according to a statement. Bonds due in 2021 rose 4.5 cents to 95 cents on the dollar as of 10:40 am in New York, the highest since Jan. 8. The company’s shares climbed as much as 6%.

In the 99 years since it was founded to pump the oil fields of Patagonia, Argentine energy driller YPF SA has been whipsawed by countless booms and busts. If global oil markets weren’t collapsing, it seemed, then Argentina was mired in a debt crisis that was wreaking havoc on the whole nation’s finances. Never, though, had the company been pushed into a large-scale default of any kind, Bloomberg News reported. Until, it would appear, now. Word of this came in an odd way: Officials at state-run YPF sent a press release laying out a plan to saddle creditors with losses in a debt exchange.

Shunned in global financial markets, Argentina is seeking about US$5 billion for next year from multilateral organisations other than the International Monetary Fund as it negotiates a larger refinancing programme with the Washington-based lender, according to three people familiar with the plans, the Buenos Aires Times reported. Alberto Fernández’s administration is looking to institutions including the Inter-American Development Bank and the World Bank, said the people, who asked not to be named because discussions are private.

Argentina’s Peronist government has had a wild ride in its first year of government: a sovereign default, mammoth debt restructurings, sliding reserves, a currency crisis and a weak economy battered by COVID-19, Reuters reported. There have been wins and losses since taking office in December last year. Debt deals were struck that allowed the government to revamp some $110 billion in foreign currency bonds and push repayments well into the future. Crunch talks with the International Monetary Fund remain positive.

Holders of Argentina’s $15bn in provincial debt are growing nervous that pressure from the national government is behind “arbitrary” demands for debt restructurings, threatening investors with big losses, the Financial Times reported. After the successful restructuring of $65bn in sovereign debt with foreign creditors in August, Argentina’s leftist government is now locked in talks with the IMF to renegotiate the repayment of $44bn lent since a currency crisis in 2018. Foreign creditors to Argentina’s provinces are next in line.

Argentina’s Buenos Aires province has extended an already-delayed deadline to Jan. 4 for bondholders to agree a deal to restructure some $7 billion in foreign debt, the local government said in a statement late on Monday, Reuters reported. The extension comes as the latest deadline came and went on Friday without an agreement with its creditors. “The Ministry of Finance will continue to dialogue in good faith with external private creditors,” the district said in the statement announcing the extension on its website.

Negotiations between the International Monetary Fund and Argentina over a new IMF loan program are “very fluid and constructive,” with Argentine officials expected to come to Washington in the coming days for more talks, IMF spokesman Gerry Rice said on Thursday, Reuters reported. Rice told a regular news briefing that a recent IMF staff mission to Buenos Aires, made “good progress” in defining the initial elements of Argentina’s economic reform plans.

Argentine officials will travel to the United States on Thursday to meet with the International Monetary Fund (IMF), as the country renegotiates already-disbursed loans of about $44 billion, a government source told Reuters on Wednesday, Reuters reported. The fund said at the end of November that it had begun to outline, together with Argentina, a new program to help the government face the country’s profound economic and social challenges, which have been aggravated by the COVID-19 pandemic.

Argentina’s Chubut Province said on Saturday it had struck a debt deal in principle with a majority of its creditors after a successful sovereign debt restructuring earlier this year opened the door for local governments to resolve their regional crises, Reuters reported. Chubut and its bondholders will restructure $680 million in bonds originally set to mature in 2026, exchanging them for bonds due in July 2030, the province said in a statement.

Argentina hiked interest rates on Thursday after monthly inflation accelerated to the highest level this year, a move aimed at bolstering peso savings and reining in prices amid a wider economic crisis, Reuters reported. The central bank raised the benchmark Leliq rate to 38% from 36% previously after the country’s statistics agency had revealed October inflation speeding up to 3.8% and rolling 12-month inflation had been clocked at 37.2% in the month. The central bank also raised overnight and 7-day reverse repo rates.