The Minister of Economy, Martín Guzmán, affirmed that the offer of the Government to the holders of debt under foreign legislation is the only one that the country can face and that the bondholders ask for “a greater adjustment, but that is not sustainable.”
Guzmán admitted that there is a lot of tension in the negotiation for the debt restructuring, which is in its final stage and considered it normal. “There is a lot of tension and frustration because the bondholders gambled on Argentina and the economy did not go well and it was an economic collapse. It is normal that there are tensions and each one defends his interests. We make promises that can be kept and that is why it is in good faith, ”Guzmán said in statements to Public TV.
The head of the Palace of the Treasury indicated that “this week we are going to have the road show with the creditors, which this time will be virtual, but we are already going to discuss the proposal. What we seek is to give conditions to the country so that, once the coronavirus has passed, the proposal can be maintained over time. This proposal that we are making is a proposal in good faith, in the sense that it is what Argentina can pay and that what can be charged can be charged. ”
When asked about a request from creditors to make a greater fiscal adjustment, Guzmán admitted that “The bondholders argue that the country should have a greater adjustment, but that is not sustainable. In the last four years, primary public spending contracted by 5.6% of GDP and that did not work, ended in a drop in demand. and to this is added the situation of the coronavirus ”.
Regarding the point where the negotiations are, andThe minister stated that “everything is on the table, the grace period, the interest on the bonds and the maturities of the securities. Argentina today has no ability to pay, but we made an offer to creditors that Argentina can meet. The offer is endorsed by the IMF and the technical staff endorsed the proposal because they had judged that it was in line with the country’s payment possibilities. “
As Infobae learned, Contacts with the large investment funds have already started through video conferences and will continue for the next two weeks. Even though creditors have already announced that they will not accept the government’s initial proposal, it is discounted that the initial offer will undergo modifications.
For the three groups of creditors – the Argentine Creditors Committee; the Group of Exchange Bond Holders; and the one made up of BlackRock, Templeton and Fidelity – the Government is not negotiating in good faith. Furthermore, they indicated that the proposal “must be anchored in concrete and feasible policies”, according to a statement from the first of the three groups.
Instead of the traditional road show, the travel limitations imposed by the pandemic have forced virtual meetings that in the Ministry of Economy are called zoom show, referring to the video platform to meet remotely.
Virtual contacts will be made both with the direct participation of Guzmán and with the team of officials of the Debt Restructuring Unit, in the area of the minister’s office in the first case and from the offices of the Ministry of Finance, on the tenth floor, on the second. In addition to the representatives of the bondholders, the advisory banks (Bank of America and HSBC) and the lawyers of Argentina, from the study Cleary, Gottlieb, Steen & Hamilton, participate.
The government has set May 8 as the deadline for the closing of the offer, but it is expected that this term could be extended a few more days, if it is considered that it has the possibility of reaching a settlement. The government has until May 22 to avoid default.