LONDON/BUENOS AIRES (Reuters) - Argentina’s $70 billion debt negotiations are entering the final act, with bondholders bracing for the worst as the South American country readies a restructuring deal already delayed by the coronavirus outbreak, which creditors fear will impose steep losses.
The grains producer, which has been grappling with recession and a mounting debt crisis, is set to unveil its proposal to international creditors as early as Thursday to push back payments on its bonds issued under foreign law.
Argentina’s leaders have warned creditors the country will need substantial relief and that any offer will have to be achievable, even as the global pandemic raises the prospect of a deep recession for the country this year.
“The terms could be pretty tough and much tougher than what the market was currently pricing, so we are on the cautious side on Argentina,” said Jean-Charles Sambor, head of emerging market fixed income at BNP Paribas Asset Management.
The offer is a key step in a financial drama that began last year amid an economic meltdown tipped off by a change in leadership, from conservative former President Mauricio Macri to current center-left Peronist Alberto Fernandez.
On Tuesday, Argentina filed a $50.5 billion debt registration with the U.S. Securities and Exchange Commission, laying the path for new issuance of foreign-law bonds in what is likely to be a debt swap offer.
With talks delayed by the coronavirus - which prompted Argentina to impose a nationwide lockdown and close its borders - bondholders have griped
