Argentina Provinces Gear Up for Debt Fights After First Default

A growing number of Argentine provinces are hiring advisers and weighing options for their foreign debt loads as the national government advances its own talks to restructure $65 billion, Bloomberg News reported. Half a dozen regional governments are taking their own steps as Argentina negotiates with holders of its overseas debt ahead of a May 22 deadline. For provinces, which hold $15 billion in debt and rely on disbursements from the central government, the fate of the national talks are key. Any failure to reach an accord could complicate their standing with creditors. The path may not be easy. The province of Buenos Aires, the country’s most populous and the first one to propose its own swap over $7 billion of debt, was cut to selective default by S&P Global Ratings on Friday after it missed a bond payment. “All Argentine provinces are in a fairly weak credit situation,” said Ursula Cassinerio, an analyst at Moody’s Investors Service. “We see a fairly high probability of default and a low probability of recovery of between 35% and 65%, if there is an exchange, a restructuring, or if there is a default.” Read more

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