Recession-hit Argentina refines new offer to creditors

BUENOS AIRES (AFP) – Argentina offered a new proposal to creditors yesterday as it looks to restructure a USD66 billion debt that contributed to the crisis-hit South American country defaulting last month for the ninth time in its history.

Centre-left President Alberto Fernandez has given away little about the exact details of the new deal but said it would be an improvement on a previous offer rejected in May.

“It’s clear that Argentina needs to reach an agreement with its creditors, obviously the creditors didn’t accept” the first offer, Fernandez said on Wednesday.

In April, Argentina asked bond holders for a three-year grace period on debt repayment, a 62 per cent reduction on interest amounting to USD37.9 billion, and 5.4 per cent on capital – or USD3.6 billion.

That was rejected the following month, while Argentina then failed to pay USD500 million of interest on its bond debt, thus defaulting.

Last week, the International Monetary Fund gave its backing to a revised proposal by the Argentine government, but Fernandez insists any deal must be sustainable. The new offer could include a coupon tied to agricultural exports, the country’s main source of income, according to sources close to negotiations, which involve three separate creditor groups.