Argentina will offer institutional investors extended maturities on some short-term government debt as part of a series of measures that will also seek to change the repayment terms of its existing IMF rescue package.
Speaking at a press conference in Buenos Aires late on Aug. 28, Finance Minister Hernán Lacunza laid out new measures involving debt maturity extensions that the government hopes will help to stabilize a rapidly depreciating currency and volatile markets.
Among the moves, Lacunza said the government will look to extend the maturities on its short-term debt by three to six months. The offer will only apply to foreign and domestic institutional investors. The government also intends to start the process of extending the maturity dates on longer-dated bonds set to expire between 2020 and 2023 in order to give the country a "less demanding" repayment schedule, he said.
In each of the measures, the finance minister stressed, debt holders will receive full payment.
The government will also work to extend the repayment schedule tied to its $57 billion rescue package with the IMF, Lacunza said. However, he admitted that the conclusion of those talks would not likely happen until the next presidential term, which is set to start in December.
In a statement, the IMF said it is analyzing the debt extension plans and assessing their impact. "[IMF] staff understands that the authorities have taken these important steps to address liquidity needs and safeguard reserves," it added. "Staff will remain in close contact with the authorities in the period ahead and the Fund will continue to stand with Argentina during these challenging times."
The plan, which follows government meetings between the Argentine government and an IMF mission, is generally seen as a sort of friendly debt restructuring.
"The difference is a bit semantic," Lacunza said when asked during the press conference. "Reprofiling is without haircuts, with payment of interest. It is a voluntary negotiation of an extension of medium and long term debt terms ... to change due date but not other conditions."
Other measures include legislation that will provide the "necessary tools" to move forward with the extension offers within Argentina and internationally.
The move comes amid growing uncertainty that Argentina will be able to meet all of its coming debt repayments. The country currently faces financing needs of up to $12 billion for the rest of 2019.
Economic secretary Rodrigo Pena confirmed that the size of those financing needs will have some "room" to shrink with the new measures as well as the remaining scheduled disbursements from the IMF.
