Finally an agreement with the Paris Club

ARGENTINA - In Brief 29 May 2014 by Esteban Fernández Medrano
The government announced today that it finally reached, after long and complex negotiations, a first firm agreement with the Paris Club regarding its outstanding debt, which Argentina last defaulted in 2002. The current amount under negotiation stands today, based on April the 30th, at USD 9.7bn. This includes past due interests on top of a debt stock of close to USD 6.5bn. The objective of this agreement, whose details have not yet been published, is to pay down all the debt over the next 5 to 7 years, with an initial payment of USD 1.15bn over the next 12 months (allegedly USD 650mn in July and USD 500mn in May 2015). Economy Minister Kicillof stated that the repayment agreement with the Paris Club takes into account Argentina’s debt amortization schedule over the next years. Therefore Argentina’s payment obligations for the year 2015 and 2017 would be lower than the remaining payment periods to be able to accommodate the upcoming amortization of the BONAR and BODEN. With this agreement, the Paris Club agrees to lower the interest rate it charges Argentina from the current 7%, to 3%. This new rate might eventually be raised again to 3.8%, if Argentina asks to extend the remaining amortization period to 7, rather than 5, years. Such time extension can be requested by the local government, in case investments from the member states into Argentina (typically infrastructure investments) are lower than the debt amortization. Although these restructured interest rates have not to be read as a “post restructured” market rate for Argentina, the fact that the government managed to normalize its default position with the Paris Club, is without doubt a positive signal for its d...

Now read on...

Register to sample a report

Register
Sign-in
Forgot your password?
Copyright 2024 GlobalSource Partners. All rights reserved. This is prepared for GlobalSource Partners’ clients and may not be redistributed, reproduced, stored in a retrieval system, retransmitted or disclosed, in whole or in part, or in any form or manner, without the express written consent of GlobalSource Partners. This is distributed simultaneously to our website and other portals used by GlobalSource Partners. The information herein was obtained from various sources and is believed to be reliable but GlobalSource Partners does not warrant its completeness or accuracy. Neither GlobalSource Partners nor any Country Analyst, officer or employee accepts any liability whatsoever for any direct, indirect or consequential damages or losses rising from any use of this or its contents.