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Does the global crisis make a debt haircut in Argentina more likely?

The Fernández administration is due to present its proposal to private creditors

By | [email protected] | April 8, 2020 10:00am

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With many of the world’s biggest economies in lockdown, the coronavirus outbreak has led to weeks of frenetic trading, with global stocks heading towards their worst quarter since the 2008 financial crisis. For many this is be very bad news, and Argentina is not the exception. But the government might see one good thing come out of it, some analysts speculate: bondholders could be more open to accept a debt haircut if Economy Minister Martín Guzmán includes it in his debt-restructuring offer.

The Fernández administration is due to present its proposal to private creditors in the next few weeks. They currently hold US$83 billion in Argentine bonds – although the paper is worth much less at its current trading value. With massively devalued bonds in their hands amid a global crash in the riskiest bonds, the government hopes it might find increased appetite for…

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