Argentina is on the verge of chaotic default

US, WASHINGTON (ORDO NEWS) — Argentina missed paying interest on the loan: about $ 500 million. The authorities said they are doing their best to avoid default on bonds, and intend to take advantage of a 30-day grace period of grace. During this time, Buenos Aires needs to have time to agree with the creditors on the restructuring.

The Argentinean government wants to avoid the chaotic default that was already observed in 2002. Then the recognition of the inability to pay debts led to years of fierce litigation with creditors and the economic crisis, which sent millions of Argentines, previously considered the middle class, to the brink of poverty.

Now we are talking about debt with a total volume of $ 65 billion. The proposal for its restructuring expires May 8, and the grace period for the missed interest payment is May 22.

However, as notes Reuters , lenders accepted the proposal to restructure the Argentine debt without much enthusiasm. So the deal, which the government so hopes for, is a big question.

According to an application sent, including to US regulators, new bonds to be issued as part of the debt restructuring proposed by Buenos Aires will contain “collective action provisions” that allow Argentina to change the terms of the debt without the consent of all holders. At the same time, the Minister of Economy of Argentina, Martin Guzman, said that “the proposal is what it is.”

“The government seems to have cornered itself,” said Gabriel Zelpo, director of the Seido Buenos Aires economic advisory department, to the agency. “It is unlikely that they will resolve the restructuring issue within 30 days.”

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