country risk sinks 14.5%

Argentina’s country risk indicator sank 14.5% this Thursday, to 3,462 basis points, due to rumors of alleged progress in foreign debt negotiations.

Financial market operators indicated that there could be a rapprochement between the national government and majority groups of creditors regarding the bonds that the government intends to restructure.

The indicator prepared by the US bank JP Morgan thus returned to levels registered on April 20, the day on which the Minister of Economy, Martín Guzmán, presented the exchange offer in the United States Securities Commission (SEC, for its initials in English).

The situation generated some confusion among operators given that unofficial rumors spoke of a possible improvement in the offer made by the government to holders of dollar bonds issued with foreign legislation, but Guzmán had stated hours before that there would be no change.

The JP Morgan indicator fell 589 basis points from yesterday’s close.

Among sovereign dollar bonds, Bonar 2020 fell 1.3%; Bonar 2024 rose 1.4%; the Discount improved 1.1%; Bonar 2037 posted an increase of 1%; the Pair advanced 2.8%; and the hundred-year international bond fell 0.4%.

On the other hand, among the papers in pesos, the FY20 Bonar Dual 2020 fell 3.6%; the Discount issued under local legislation to 2033 improved 8.7%; PR13 Consolidation Series 6 2024 gained 0.5%; PR15 Consolidation Series 8 2022 advanced 4%; and the TJ20 Treasury Bonds 2020 rose 1.8%.

In the last interview with a media outlet (Public TV) Guzmán said on Monday that he planned to have teleconference meetings this week with representatives of external creditors.

“We will continue with the conversations that we have been having, discussing certain details of the rationality of the proposal. What we seek is to give conditions to Argentina so that it can stand up, so that Argentina can grow again and that growth is sustained in time, “said Guzmán.

The official then confirmed that the Government needs “that the creditors understand that this is the best way for them, because it is the proposal that reflects what Argentina can pay” going forward.

“There is a moment in which the bondholders bet on Argentina, to have high returns during the Government of (Mauricio) Macri, and the truth is that this economic model ended in a collapse and today Argentina does not have the ability to pay and that is why a restructuring needs to be done, “he said.

According to Guzmán, the one presented by Argentina “is an offer in good faith because it is an offer that we can fulfill. Offering something that cannot be fulfilled would be of little use, it would be kicking the debt forward.”

Find out the latest on digital economy, startups, fintech, corporate innovation and blockchain. CLICK HERE