Extended deadline for Buenos Aires province to restructure debt
Buenos Aires province’s debt restructuring deadline is set to expire today.
Buenos Aires seeks to exchange $7 billion in bonds as Argentina experiences pandemic-induced recession and high inflation rates along with a period of extended indebtedness due to missed payment deadlines.
The deadline comes as Buenos Aires’ governor, Axel Kicillof, once again extended the acceptance period for its restructuring debt proposal. The province defaulted last year by not paying a maturity of $110 million. It had to extend the negotiation period 20 times before reaching any degree of consensus on the terms and conditions.
The Buenos Aires Ministry of Economy, Pablo López confirmed that an agreement was reached with 90 percent of the creditors, which will imply a financial relief for the province of more than 4.6 billion dollars up to 2027, extending the repayment terms. The government will likely extend the deadline yet again in order to reach 100 per cent of agreement between bondholders. This will likely fuel inflation concerns and harm investor confidence in the country that already lacks creditworthiness. With the November midterm elections approaching, the current financial crisis will erode support for President Alberto Fernandez’s Frente de Todos coalition.
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