On May 22 local time, Argentina failed to pay an interest of US $ 500 million in debt due. This is the ninth sovereign breach of contract in Argentina ’s restructuring negotiations with creditors since independence.
According to Argentina ’s national media, The Horn, the Argentina side hopes to postpone the interest of the previously delayed US $ 500 million bond once again. The negotiation time is until June 2. However, creditors will not file suits due to the maturity of the debt, considering the Argentine government ’s willingness to pay and negotiate.
Argentina ’s ambassador to the United States wrote in a letter: “Given the possibility of reaching agreement with creditors on the new terms of their bonds, Argentina will delay the payment of this Friday Payments due until an agreement is reached with the creditors and the new terms of interest payments on the bonds mentioned above are reached. “
According to Reuters, Argentina should have been in April On the 22nd, the interest on the bond of about US $ 500 million was paid. If it cannot be repaid, or if no feasible solution is proposed within the 30-day grace period, Argentina will formally default on May 22.
According to Xinhua News Agency, the Argentine government proposed on April 17 to replace the existing approximately 65 billion US dollars of foreign debt with new bonds with lower interest rates and later maturity. To avoid default again. The Argentine government gave creditors 20 days to review the plan, but the three international creditor groups holding most of the Argentine debt issued a statement at about the same time on April 20, rejecting the Argentine government ’s proposal.
Creditor groups composed of large global asset management companies such as BlackRock hold more than a quarter of bonds issued by Argentina since 2016, as well as the previous reorganization of the Argentine government 15% bond distributed to investors after debt.
However, the Argentine Creditors ’Committee composed of insurance companies, mutual funds and other institutions issued a statement criticizing Argentina ’s“ unilateralism ”in negotiating debt restructuring. Feasible solution. Another investor group holding 16% of Argentina’s restructured bonds also rejected the proposal. Members of this group include hedge funds Monarch Alternative Capital and HBK Capital Management. The group said that the group held more than 16% of the exchange bonds issued by Argentina, totaling more than 4 billion US dollars.
After independence in Argentina in the 19th century, Argentina experienced many debt defaults or reorganizations. Huge government spendingThe sharp increase in fiscal deficits and large external borrowing are the main reasons.