dChan - Q Origins Project Archive

Argentina formalizes revised debt offer, extends deal deadline

It follows the issuing on Saturday night of an official decree approving a second round of amendments to the government’s initial offer made back in April, an important step to clinch a deal. In an accompanying statement, the government said it would submit the new offer to the U.S. Securities and Exchange Commission on Monday. On Sunday, the government said in the official gazette that the invitation would expire at 5pm New York City time on Aug. 28, confirming an anticipated delay to its earlier deadline of Aug. 24 to give bondholders a 10-day window after the formal SEC filing. Argentina and its main creditor groups reached an agreement in principle on Aug. 4 to restructure about $65 billion in distressed sovereign bonds after months of talks, breaking an impasse that had threatened to derail negotiations.

In the statement on Saturday night, the government said the formalized offer aimed to “bring public finances into balance, give certainty to the private sector and provide the country with a new platform for growth”. It added the proposal reflected the financial terms of the Aug. 4 agreement and dialogue with creditors, the International Monetary Fund and other international bodies on legal elements. It gave details of the amendments, which involved improving the net present value of the offer with earlier coupon payments but not additional cash flow. With an already weak economy further punished by the coronavirus, the government wants to avoid the kind of messy sovereign bond default that punctuated a crisis in 2001 that tossed millions of middle class Argentines into poverty.

After the bond revamp is done, Argentina will start talks with the International Monetary Fund toward a new program to replace a defunct $57 billion standby lending deal negotiated by the previous administration two years ago.

https://www.reuters.com/article/us-argentina-debt-proposal/argentina-formalizes-revised-debt-offer-extends-deal-deadline-idUSKCN25C04M

Argentina May Add Changes to $200 Greenback Purchase Quota

Argentine President Alberto Fernandez said his government may introduce changes to the $200 monthly limit on U.S. dollar purchases based on the official exchange rate. In 2019, Argentina’s central bank imposed the $200 quota on monthly greenback purchases per person. Later that year, under Fernandez’s government, authorities added a 30% tax on those purchases. The tax would boost the current official exchange rate of 77.3 pesos per dollar in banks to about 100 pesos, which is still lower than the rate of around 130 pesos in the black market. An official from the Economy Ministry, with direct knowledge of the discussions, said that the $200 quota will remain unchanged. The official, who asked not to be identified because the information isn’t yet public, said further restrictions are not being studied.

Fernandez also said that the country’s cash reserves are about $10 billion, at the same levels they were at when his presidency started on December 2019. “We received a country that was in default and in that context the pandemic began.”

https://www.bloomberg.com/news/articles/2020-08-15/argentina-may-add-changes-to-200-greenback-purchase-quota