The government is seeking to renegotiate most of the …

The government announced a debt restructuring with bondholders to contain the financial race sweeping international reserves. The emergency proposal is to start renegotiating the requested credit to the International Monetary Fund in order to extend the repayment period. The agency must always confirm the next disbursement provided in the agreement. Yesterday, he simply announced that his representatives had returned to the United States and issued an elusive statement. Faced with a scenario of increasing financial vulnerability that has emerged throughout the administration of Mauricio Macri, the Palacio de Hacienda has ordered the unilateral modification of the conditions of very short-term debt securities expiring this year to allow payments over $ 11,000 million for six months. President Macri has signed a decree of necessity and urgency to implement forced changes in the various families of letters sent that will enter into force on Friday, when published in the Official Journal.

The new Minister Hernán Lacunza has presented these measures as an attempt to lighten the debt burden that the next government will inherit, but the proposed tools testify to the renewed difficulties he faces in dealing with debt and debt maturities. to new exchange pressures. The proposal that the government will present to creditors with Argentine securities issued with terms of up to ten years is to postpone the repayment deadlines. Complex transactions include bonds in pesos, dollars, euros, yen and Swiss francs for an amount equivalent to $ 50,000 million. The introduction of amendments to the obligations governed by Argentine law requires the authorization of the Congress. Attempts by holders of securities issued under foreign laws require a high number of members in bademblies of potential investors organized around the world by international banks.

Announced after another frenetic financial day, these measures represent a new attempt to mitigate the economic slippage that has accelerated with the overwhelming defeat of the ruling party in the primary elections. "In these times of financial stress and exchange rate, the goal is that the dollar and inflation no longer progress. Stability is an inalienable goal, "said Lacunza at the start of the press conference. He then sent a political message to the opposition, which the government was trying to hold responsible for its economic failure: "All political forces want to win the elections, but it is no excuse to jeopardize the stability of all. the Argentines. Whoever wins, we can not leave him without tools, "he said. "We need to be able to agree on a campaign to protect the financial system. A restless river, nobody wins more than speculators. It is necessary to dispel doubts about the ability of Argentina to pay this year and during the next period of persecution, "said the official, who read his speech accompanied by his key collaborators.

The attempt to eliminate the risk of default involves four measures: 1) postpone the maturities of the short-term securities – Letes, Lecaps, Lelinks and Lecer – for six months; 2) send to the Congress a project allowing a voluntary extension of the conditions of payment of obligations governed by Argentine law; 3) start the tour to change the expected durations of bonds issued with foreign legislation; and (4) initiate renegotiation of the agreement with the IMF to extend the cancellation of the agreement. "This is not a default, no contract will be violated. This is not a restructuring either. We push the deadlines without deletion and the interests are maintained. We propose to rebalance debt maturities, "official sources said yesterday.

The increasing difficulties faced by the incumbents in renewing their roles led to the cancellation of the last two offers. In other words, investors have decided to collect and buy dollars. With this diagnosis, the measure to subtract the immediate pressure will be mandatory. From the Palacio de Hacienda, they indicated that the documents received totaled the equivalent of 13,000 million dollars. Institutional investors such as banks and insurers will charge $ 11,000 million in three installments: 15% at maturity, 25% at three months and the remaining 60% within six months. The small portion that is in the hands of small savers, about $ 1,900 million, will be canceled at the time of expiration. To avoid benefiting investors who have purchased these papers at the auction price in recent weeks, only those who have possession of these papers since July 31 can access full payment.

Along with the bonds, the official claim is to modify the terms of payment of $ 30,000 million of debt issued under foreign laws and an amount equivalent to $ 20,000 million of securities governed by Argentine law. The documents included are those that have been published for a 10-year term. The transaction excludes, for example, the heavy 100-year bond and the securities delivered during the 2005 and 2010 swaps. The extension of payment terms in instruments subject to local legislation requires, before Congress approval, This will allow the Treasury to negotiate changes with the owners. In order to advance the instruments governed by foreign legislation, proposals will be received from international banks that should convene holding meetings. To extend the deadlines, it is necessary to reach the parameters set in the collective action clauses: approval of 75% of the holders of each title or 66% of each family of obligations as soon as the floor reaches a floor. 50%. the papers. It is unlikely that the tour announced yesterday, recognize officials, be completed before the elections.