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BCN-03
ARGENTINA-ECONOMY-DEBT-MARKET
Argentine stock exchange surges as debt deal nears
BUENOS AIRES, June 9, 2020 (BSS/AFP) – Argentina’s main stock exchange climbed more than eight percent on Monday as hopes rose that the government will reach agreement with creditors over a $66 billion debt repayment.
The Buenos Aires exchange climbed to a record 48,881 points having also gained 19.3 percent last week.
The government of center-left President Alberto Fernandez is expected to announce on Friday that it has reached a deal with its creditors.
Just under three weeks ago, Argentina defaulted for the ninth time in its history after failing to pay $500 million of interest on its bond debt.
The government has extended its deadline to restructure this $66 billion bond debt three times after creditors rejected an initial offer.
Argentina, one of the world leaders in food exports, has been involved in months of tough negotiations with creditors.
“The proposals are still a long way from an agreement, but the tone of the discussions has changed and the distance (between parties) is not irreconcilable,” said analysts Grupo SBS on the specialist website Ambito.com.
Last week, the International Monetary Fund gave its backing to a revised proposal by the Argentine government.
In April, Argentina asked bond holders for a three-year grace period on debt repayment, a 62 percent reduction on interest amounting to $37.9 billion, and 5.4 percent on capital — or $3.6 billion.
That was rejected by most creditors, but the revised proposal implied slightly more favorable terms, offering creditors in the region of 45 cents on the dollar.
Argentina has said a successful negotiation would “stabilize the economy, alleviating the medium and long-term restrictions” on the economy, thus “allowing the country’s economic trajectory to be redirected towards long-term growth.”
The crisis-wracked South American country, which has been in recession for two years, currently owes $324 billion, the equivalent of around 90 percent of its GDP.
BSS/AFP/MMA/1025HRS