Argentina

Argentina’s government is seeking to extend maturities on tens of billions of dollars of debt and delay repayments to the International Monetary Fund after a collapse in the peso and its bonds, Bloomberg News reported. The government will postpone $7 billion of payments on short-term local notes held by institutional investors this year and will seek the “voluntary reprofiling‘’ of $50 billion of longer-term debt, Economy Minister Hernan Lacunza said. It will also start talks over the repayment of $44 billion it has received from the IMF.

Argentina investors scorched by one of the worst sell-offs in the history of emerging markets are banking on the International Monetary Fund to buy the country some time, Bloomberg News reported. IMF officials are visiting Buenos Aires and will give their recommendation within weeks on whether to disburse another $5.3 billion to the country from a record bailout approved in 2018.

Argentine executives and graduates shocked by President Mauricio Macri’s drubbing in elections this month have begun calling and emailing in droves in search of work in Brazil, Chile and Colombia, head hunters and visa advisers told Reuters. Executive search specialists say the resumes that have deluged their offices in those countries reached a peaked after Macri lost ground to a centre-left Peronist challenger in the Aug. 11 primary elections, causing the peso to plummet in value, Reuters reported. Leftist Alberto Fernandez is now the front-runner ahead of an Oct.

The International Monetary Fund’s record loan to Argentina last year was supposed to turn the page on a troubled history, Bloomberg News reported. It’s looking more like a case of déjà vu. Less than two decades ago, Argentina crashed out of an IMF program, defaulted on debt and plunged into depression. As Fund officials arrived in Buenos Aires over the weekend to assess the country’s current $56 billion bailout –- and decide whether to keep doling out cash -- some of the same warning signals are flashing.

Trading Argentine bonds has become a test of endurance as the prospect of a possible default triggers wild price swings and volume dries up, Bloomberg News reported. The Liquidity Assessment Scale of 1 to 100 (100 being the most liquid) slumped to 12 on Wednesday for the South American nation’s bonds from 68 just three weeks ago. “There is a lot of hysteria in the market and it is causing a lot of uncertainty on valuations,” said Jason Devito, a Pittsburg-based money manager at Federated Investment Mgmt Co., which has $502 billion under management.

Less than two years after Argentina made a splash in markets by selling a $2.75 billion, 100-year bond, another debt restructuring is a real possibility after President Mauricio Macri was routed in a primary election, Bloomberg News reported. Money managers and analysts from firms including Citigroup Inc. and Bank of America Corp. say investors are likely to recoup less than 40 cents on the dollar on its notes if Argentina reneges on its debt for the third time in two decades.

The cost of insuring against an Argentine sovereign default climbed on Tuesday as Hernan Lacunza was sworn in as the new treasury minister of the crisis-hit country, Reuters reported. Argentine 5-year credit default swaps (CDS) were quoted by IHS Markit at 2,990 basis points (bps), up 77 bps from Monday’s closing level of 2,913 bps. Markit calculations, based on Monday’s closing prices, estimate a 82% probability of a sovereign default within the next five years.

The slump in the Argentine peso last week made the country’s pile of debt much harder to repay, signaling a renegotiation may again be in the cards for the South American nation, Bloomberg News reported. As of March 31, Argentina had $33.7 billion in foreign-currency debt payments due by year-end, the majority in short-term Treasury bills, or Letes, according to the latest debt report by the Finance Ministry. Most of that still needs to be repaid.

After a brief respite at the end of last week, Argentina’s debt is getting hammered again. The nation’s offshore notes approached new lows on Monday, close to wiping out the small rebound from late last week, after the country was downgraded deeper into junk territory by two of the three biggest ratings companies and the Economy Minister Nicolas Dujovne resigned, Bloomberg News reported. The extra yield investors demand to own Argentine bonds over U.S.

Fitch Ratings has downgraded Argentina, citing concerns about the country’s capacity to repay its debt following a collapse in the peso triggered by the surprise victory of Peronist Alberto Fernández over incumbent president Mauricio Macri in recent primary elections, the Financial Times reported. The rating agency slashed Argentina’s rating to CCC and warned the country could lose market access should Mr Fernandez move sharply away from the policy path set forth by the current administration.