Argentina

Bondholders have balked at a plea to accept late payment on debt backed by the province of Buenos Aires, in a stand-off that could complicate already delicate negotiations over Argentina’s central government debt, the Financial Times reported. Buenos Aires province’s bonds fell sharply on Wednesday after a group of investors criticised an attempt to secure their approval to postpone a $250m debt payment coming due on January 26.

Argentina will send a bill to Congress on Tuesday outlining a plan to address the debt crisis and make payments “sustainable,” Economy Minister Martin Guzman said, Bloomberg News reported. South America’s second-largest economy isn’t able to pay its debt under current conditions and will look to either alter maturity dates, interest rates or outstanding capital amounts, Guzman said. Exact details of the proposal will have to wait, he said, though the bill will cover foreign law bonds as well.

Argentina’s Chubut province bonds plunged to the lowest since November after local officials said they wanted to renegotiate the debt, Bloomberg News reported. The bonds due 2026 slid as much as 8 cents to 63.3 cents on the dollar after its economy minister Oscar Antonena proposed reducing coupons and suspending principal payments for four years on $650 million of the overseas bonds. Antonena told local reporters that the province is sending the proposal to its local legislature along with a fiscal readjustment plan that would shrink its bloated public sector.

Argentina’s inflation rate hit 53.8 per cent in 2019, climbing to its highest level in almost three decades and underlining the scale of the challenges facing the embattled country’s new leftist president, Alberto Fernández, the Financial Times reported. The national statistics agency announced on Wednesday that prices rose 3.7 per cent in December after renewed currency volatility ahead of elections last year, confirming Argentina’s place among the top five countries with the highest inflation rates in the world — behind Venezuela, Zimbabwe, South Sudan and Sudan.&nbs

Buenos Aires province has started talks with some creditors as officials seek their blessing on a plan to delay a $250 million payment due this month, Bloomberg News reported. Discussions have taken place with more than 10 groups or individual funds that own the overseas notes due in 2021, according to a provincial official who asked not to be identified. The idea is that pushing back the payment will avoid a hard default and allow the province, the federal government and creditors more time to come up with a comprehensive restructuring plan.

Bonds issued by the province of Buenos Aires fell sharply on Monday after a minister in the national government said the state would not come to its aid in making a big debt payment due at the end of this month, setting investors on alert for tough negotiations over the country’s sovereign debt, the Financial Times reported. Debt backed by Argentina’s most populous province and set to mature in 2021 fell over 10 per cent to 62 cents on the dollar. Another bond maturing in 2027 saw its price slip about 3 per cent to 44 cents, while government debt prices also wobbled.

President Alberto Fernandez said he has set a March 31 deadline to renegotiate Argentina’s rampant public debt and that a more “innovative” International Monetary Fund approves of the direction his government is taking, Reuters reported. Argentina is in talks with bondholders and other creditors to restructure about $100 billion in debt, among them the IMF to whom it owes about $44 billion. “I think that from here to March 31 our trajectory is going to be very clear,” Fernandez said in an interview published on Sunday by the online news site El Cohete A La Luna.

Buenos Aires’s plan to seek talks with creditors ahead of a debt payment due this month has torpedoed one of the world’s best bond rallies, Bloomberg News reported. The province’s $500 million of notes due in January 2021 tumbled 5.3 cents Wednesday to 64 cents on the dollar, their worst day in more than four months. The securities had returned 54% from the end of August through Tuesday, putting them among the top performers in emerging markets.

Argentina’s new central bank president pledged to further cut interest rates to boost a free-falling economy while fighting inflation through a “social pact” that would encourage companies to raise production rather than prices, Bloomberg News reported. Miguel Pesce said he expects the key rate floor to fall again in January after two cuts last month. At 55%, the benchmark rate is still the world’s highest, although considerably lower than the September peak of 85% recorded under his predecessor.

S&P Global Ratings raised its debt grade for Argentina on Tuesday, acknowledging the agency made a mistake when it changed the rating in late December for the crisis hit country, The Business Times reported. S&P bumped the rating on foreign long-term debt to 'CCC-' from 'CC,' taking it up two notches from 'SD' and back to where it was prior to December 20 when the country was declared in default. After bumping the rating up a notch on December 30, 2019, "we identified that we had misapplied our criteria," S&P said in a statement.