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The Government of Argentina looks into extending the term of its liabilities

September 02, 2019 | Cbonds

"The Government of Argentina plans to extend the maturities for short-term sovereign liabilities at USD 6 bln and to start negotiations next week on the revision of maturity of the loan, issued by the IMF to the country in the summer of 2018", the Minister of Finance of Argentina Hernan Lacunza said during a press conference on Wednesday. Similar actions may be taken in respect of long-term domestic and foreign government borrowings.

This decision was made to ensure timely performance of liabilities. At the same time, Hernan Lacunza noted that the Government "has no solvency problems, but there are problems with liquidity". On August 27, the Ministry of Finance of Argentina failed to place short-term securities denominated in pesos at ARS 60 bln and denominated in US dollars at USD 1 bln.

The decision to extend the maturities will affect only short-term domestic liabilities held by the institutional investors and will not be applicable to the securities held by the private investors. As additional measures to reduce the pressure of the debt load, the Government of Argentina is drafting a bill on "voluntary extension of maturities" for medium-term domestic liabilities (maturing in 2020-2023), at about USD 50 bln.

The market reacted immediately to the Minister's speech – S&P lowered Argentina's sovereign credit rating in the national and foreign currencies to the level of "selective default" ("SD"), and short-term liabilities, the maturity of which will be extended, were rated "D" – default.

Company: Argentina

Full company nameRepublic of Argentina
Country of riskArgentina
Country of registrationArgentina


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