BUENOS AIRES (Reuters) – Argentina’s sovereign bonds dipped almost 1% on Monday as a deadline for restructuring talks neared, with the South American country and its creditors at an impasse over proposals to revamp around $65 billion in foreign debt.
The government is weighing a decision on whether to extend its negotiations, which have hit a roadblock ahead of an Aug. 4 deadline after creditors rejected the country’s “final” offer and rallied behind a counterproposal.
Reuters reported last week, citing a source close to the talks, that the national government was discussing a delay until mid-to-late August. [L2N2F01TT]
Argentina’s largest province, Buenos Aires, did extend the deadline on its own smaller $7 billion debt talks until Aug. 14 on Monday after a previous date of July 31 passed without a deal, a potential sign that the sovereign would follow suit.
Argentine President Alberto Fernandez and Economy Minister Martin Guzman have been adamant that the amended offer made in early July, following months of talks, is the maximum effort the recession-hit country can make.
“We can’t offer creditors more,” Guzman told local outlet Pagina12 on Sunday.
“If there’s no deal we will advance with the IMF on a new program and come back to talk with the private sector in six or eight months, but with a deeper restructuring proposal.”
Citi Research said in a note that given the small gap between the two sides – seen at around 3 cents on the dollar – talks should continue, though there was growing “uncertainty” given that both sides were digging in their heels.
Argentina, a major grains producer that has been in default since May, struck a $57 billion deal with the International Monetary Fund in 2018.
Guzman has said Argentina is assessing all options ahead of the Tuesday deadline, though the government has hinted at a delay.
(Reporting by Adam Jourdan; Additional reporting by Rodrigo Campos; Editing by Steve Orlofsky)
