Argentina needs ‘substantial’ relief in $70 billion debt talks


By Ritu,

Capital Sands

Argentina will need “substantial relief” as it restructures nearly $70 billion in debt with international bondholders, the country’s economy minister Martin Guzman told , signaling a tough tonic ahead for the country’s creditors.

In his first interview with international media since taking up his role in December, the 37-year-old U.S. trained economist, said a March 31 deadline to strike a deal with bondholders may also be affected by a global coronavirus outbreak that was hitting plans for road shows for the government’s debt proposal.

In an hour-long conversation in his office in central Buenos Aires, Guzman said Argentina does not have the capacity to service its foreign currency bonds for a “few years” and that any agreement with creditors needed to put public debts on a sustainable path.

Argentina is locked in debt restructuring talks with global creditors including Pimco and BlackRock Inc  to avert a damaging sovereign default that would block the giant grain producer’s access to global markets.

Guzman and his debt team have laid out a plan to strike that deal with creditors by the end of March, though he indicated that there may have to be flexibility given the current global situation, including the coronavirus outbreak.

He added road shows planned for this month for government officials to take their case to creditors had been affected and may have to be done by video conference.

“We have been on track, but now we are in a situation of global emergency that requires that every side is flexible,” Guzman said, adding if the March 31 deadline was missed it should only be by “a matter of days.”

Government officials met with bondholders earlier this month, while negotiations are ongoing with the International Monetary Fund (IMF), which has lent around $44 billion to the South American country.

The debt negotiations could determine Argentina’s economic future and global standing in markets for years following the current period of economic turmoil that has seen high inflation, recession and rising poverty.

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