THEArgentina ask the creditors more time to repay the debt and thus avoid yet another default, the ninth in its history.
According to the Financial Times, Buenos Aires aims at delaying payment of $7 billion in short-term debt expiring this year and to get one "voluntary" extension for payments of $40 billion of long-term debt, most of which in the hands of foreign investors, in addition to postpone payments of the 44 billion dollars already paid by the IMF. Overall, the maturity extension operation should involve government bonds for approx 110 billion dollars.
The decision to request debt restructuring was taken by the president Mauricio Macri a few weeks before the presidential election, after defeat in the primaries and at the end of a three-day IMF mission to Buenos Aires, led by Roberto Cardarelli.
The project was illustrated by the Argentine finance minister, Hernan Lacunza, who believes this is the only way forward due to the further worsening of the economic situation produced by thegalloping inflation and from weight depreciation.
Lacunza spoke of a restructuring of the foreign debt in the short, medium and long term "without cuts in principal and interest”. In detail, the Letras (securities similar to Bots), the debt maturing with the IMF and long-term securities in the hands of foreign investors (maturity 2020-2023) will be affected.
As for the IMF, "it is analyzing the operation" to "assess its impact", said spokesman Gerry Rice at the end of the IMF task force mission, which is now returning to Washington.
However, in the eyes of the market, these moves are not enough to avoid bankruptcy. The US rating company S&P Global Ratings placed Argentina in a position of technical default, because he believes that the extension of the maturities of short-term government bonds entails a "non-compliance with the agreed payment times".
In a note published in Washington and relaunched by the Argentine media, S&P nevertheless adds that this analysis, "supported by the impossibility for Argentina to place short-term securities", could be revised if, as assured, redemption of the securities will eventually materialise.
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