Argentina

Argentina will make an offer to its creditors “in the coming days” that will reflect the economic hit from the coronavirus pandemic, President Alberto Fernandez said in a newspaper interview. While debt talks are “going well,” calculations of debt sustainability will be affected by the impact of the virus, Fernandez was quoted as saying by Perfil. “The coronavirus affects debt renegotiation just as the coronavirus affects the entire global economy,” Fernandez said. “What we are going to sign is something that we can accomplish as a government and as a country.

Latin America’s economy was already going backward when the coronavirus hit. Now it’s at risk of losing a whole decade –- and pushing fragile democracies closer to their breaking points, Bloomberg News reported. Like most of the world, the region is bracing for the deepest recession in its modern history. Bank of America expects a 4.4% slump in output this year as the epidemic spreads. But what’s distinctive about Latin America is that incomes had already been declining for years –- driven in part by lower commodity prices.

Argentina unilaterally postponed until next year the payment on $10bn of dollar-denominated debt governed by local law on Monday in what some analysts have called a technical default, the Financial Times reported. The move has raised new concerns about Argentina’s approach to debt restructuring as it negotiates the fate of $83bn in debt issued under foreign law. Private sector investors holding that debt expect an offer to be made by the centre-left government of President Alberto Fernández as soon as this week.

The Covid-19 pandemic pushed Moody’s Investors Service to downgrade Argentina, Ecuador and Zambia deeper into junk territory on Friday, Bloomberg News reported. Moody’s warned of escalating default risks in the three developing nations as global coronavirus cases topped 1 million. The combination of stalled trade, low commodity prices and deteriorating growth has sent emerging-market risk premiums soaring. Bonds from Argentina, Ecuador and Zambia have tumbled amid concern the nations may follow Lebanon’s lead in defaulting.

Argentina’s debt restructuring talks with creditors will continue for at least two more weeks after the centre-left government failed to meet its deadline of March 31 to cut a deal, the Financial Times reported. The deadline had been considered to be ambitious by investors and economy minister Martin Guzmán admitted on Tuesday that the outbreak of the coronavirus pandemic, which has now claimed 27 lives in Argentina, had further delayed progress in negotiations.

Argentina said it will still try to avoid a costly default, even as it extends a nationwide lockdown to stop the spread of coronavirus. President Alberto Fernandez said that the country would still prioritize avoiding a default on its overseas debt, even though the already struggling economy will be hampered by a government-ordered lockdown, now in effect until April 12, Bloomberg News reported.

Argentina’s plans to restructure more than $100bn of private sector debt have been thrown into disarray by the coronavirus pandemic, which is threatening to plunge the country’s already struggling economy into an even deeper recession, the Financial Times reported. While the crisis that has hit global investments could make creditors less willing to compromise, analysts warn, it could also embolden the government to push for a harsher deal, raising the chances of a disorderly default.

Agitating bondholders have written to Argentina’s government, accusing it of not doing enough to allow the country’s crucial debt restructuring negotiations to make progress, according to bondholder sources involved in the process, Reuters reported. Two sources told Reuters on the condition of anonymity that the three main creditor groups had sent letters in recent days saying that they wanted to contribute to an “orderly resolution” of Argentina’s debt challenges. However, the creditor groups said they were concerned there was “a shortfall in collaboration” on the part of the government.

Argentina's government has struck a deal with domestic bondholders to swap around 200 billion pesos ($3.2 billion) in local currency debt in a major planned auction on Thursday, the country's Economy Minister Martin Guzman told Reuters. The scheduled swap, which is offering new instruments that expire between 2021 and 2024 for others maturing up to this year, is part of Argentina's drive to gain more time to make payments amid a widespread debt crisis, the International New York Times reported on a Reuters story.

Argentina will need “substantial relief” as it restructures nearly $70 billion in debt with international bondholders, the country’s economy minister Martin Guzman told Reuters, signaling a tough tonic ahead for the country’s creditors, Reuters reported. In his first interview with international media since taking up his role in December, the 37-year-old U.S. trained economist, said a March 31 deadline to strike a deal with bondholders may also be affected by a global coronavirus outbreak that was hitting plans for road shows for the government’s debt proposal.