Argentina Unveils Debt Restructure Proposal
Long before the coronavirus pandemic sank much of the world into recession, Argentina’s economy was already in shambles amid a sharp drop in the value of its currency and double-digit inflation. 15 years after one of the harshest sovereign bond negotiations in modern history, Argentina's new proposal appears to offer only slightly better terms. The highlights: a three-year moratorium, a 62% reduction in interest payments and a 5% cut in the value of the principal.Under the proposal, Argentina would start paying a 0.5% coupon in 2023 that would grow over time, so that the average interest rate would be 2.33%. The haircut on principal is equal to $3.6bn, while the reduction on interest obligations is $37.9bn, according to a Bloomberg article. The country has a total debt load of more than $323bn, equal to 89% of GDP, and its foreign reserves have tumbled more than 40% over the past year to just $43.9bn. “For Argentina, a country with a long track record of default, to come and offer a haircut on interest but not as much on capital, I think is relatively good news,” said Jimena Blanco, head of Latin America research at consulting firm Verisk Maplecroft in Buenos Aires. “If you are able to settle the debt restructuring in this context, at least it provides some breathing room for the government.”
Riassumendo:
1) moratoria interessi per 3 anni
2) taglio del 62% degli interessi
3) taglio del capitale del 5%
Tutto sommato poteva andare peggio.....
