Argentina's offer to restructure 65 65 billion in foreign bonds by defaulting on interest payments by the country would improve the terms of the offer.
Economy Minister Martin Guzman did not give any details of his plans in an interview in his office fee, but said discussions with creditor groups were ongoing. Recent proposals from bondholders have narrowed the gap between the parties.
The South American nation, burdened by around 50% of inflation and a declining economy just before the epidemic hit, missed the deadline of interest payments of ments 500 million on Friday payments. The government has said it needs debt relief of 40 40 billion to get Argentina back on track for sustainable growth, and officials have been in talks with bondholders for two months.
"Our aim is to amend the offer based on negotiations so that it is consistent with the constitution, which we will face, as well as the preferences and objectives of the bondholders," Guzman said. "The message we get from the bondholders is that they are interested in continuing the negotiations."
Argentina has extended the deadline for creditors to consider its debt restructuring offer until June 2. Key bondholders have pledged not to sue for immediate repayment on default debt, which will allow negotiations to continue on friendly terms, Guzman added.
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Argentina has demanded a three-year term on payments, sharp cuts in interest rates and major remaining reductions. People familiar with the matter said earlier this week that there is a gap of about 20 cents in dollar dollars between what the government is offering and what creditors want.
According to Guzman, the government remains flexible on the specifics of the deal and can use sweeteners to make creditors more attractive.
“There’s relief on the connection of parameters,” he said. "While the counteroffers we received last week are closer than the ones we received before, they are still far enough to sustain Argentina."
There was a slight change in bonds on Friday, with most securities trading between 0 and 40 cents on the dollar, as investors largely expected Argentina not to overpay. Amid some optimism there may have been a lack of note in recent weeks about what could be an explanation in the coming days and weeks.
Investors have resigned to a certain amount of losses, and the government has tried to keep things friendly by avoiding the rhetoric of haunting creditors, who have been the target of the country's wars with hedge funds since the 2001 default.
Bondholder groups on Friday lamented the payments made but said negotiations would continue.
Argentina's default at the turn of the century led to 15 years of costly court battles with creditors. According to Alberto Ramos, head of Latin American economics at Goldham Sachs Research, we are unlikely to see a recurrence.
"Looking at all these signals that all these things seem to be progressing, I don't think anyone will take action immediately," Ramos said. "There will be understanding with bondholders and life will move forward."