Article today in FT.com

jlynch

Registered
Sorry, I had a synapse breakdown - should have said Financial Times. I do have access to some Economist articles. I used to think that the magazine's evaluation of Argentina was too negative but it seems to have been sadly right.

I'd much appreciate seeing more FT pieces. Among the Washington international community, it is considered the best source of economic news. Specially after Murdoch's WSJ takeover.
The following plugin for both chrome and firefox bypasses the paywall on those mentioned sites and 133 more.
 

Ceviche

Registered
Argentina on brink of default as it wrangles with bondholders (ft.com - 21 May'20)



Investors have abandoned hopes of a last-minute reprieve in negotiations with Argentina to restructure $65bn of foreign debt, as the country braces itself for a ninth sovereign debt default. Both sides say talks will continue after Friday, when the 30-day grace period for previously missed payments lapses. But simmering tensions over the failure to reach a deal remain, and there is still the danger of a chaotic fallout from a technical default. Bondholders accuse Martín Guzmán, Argentina’s economy minister, of being too dogmatic, while the government complains some creditors have acted high-handedly. But some are optimistic of a settlement. “The contours of a deal are clearly visible,” said a person familiar with the government’s thinking, who believed a deal must be reached within “days to weeks”. “It’s like when you’re far from a mountain summit,” the person said. “It’s not like they are about to sign something, but you can see where the scope for a deal is.” An extension of Argentina’s offer is now widely expected after Mr Guzmán this week described the Friday deadline as “anecdotal”, admitting there was a “big chance” it would be extended. But bondholders say negotiations so far have been frustrating. “We still have no real idea what the government is thinking, and here we are [a day away] from a default,” said a person who is involved with a BlackRock-led group of creditors. The group counts Fidelity, Ashmore and T Rowe Price among its members. “Frankly, the Argentine government has engaged virtually not at all with anyone for months in this whole process,” added the person. Nonetheless, the person believes the proposals from creditors and the government are “not a million miles away from each other. There is a landing zone in there.” Bondholders submitted three separate counter-proposals last week in response to the government’s original offer that included a 62 per cent “haircut” on interest payments.

The counter-proposals are “a step in the right direction”, according to the person familiar with the government’s thinking, but remain too far from what the state is able to pay. One particular flashpoint is the government’s insistence that all bond payments should be suspended for three years — close to the end of President Alberto Fernández’s four-year term. Each of the bondholders’ counter offers proposed a grace period of just one year. “What creditors have put forward here is pretty much the bottom line,” said a member of another bondholder group. “The ball is in their court. We have delivered a proposal.” Recommended The FT ViewThe editorial board Debt relief alone will not save Argentina According to Siobhan Morden, head of Latin America fixed income at Amherst Pierpont, a securities firm, the government’s proposal suggests a recovery value of 39 cents on the dollar for the bonds issued after 2016, assuming that the new bonds trade at a yield of 10 per cent after the restructuring. The equivalent value is roughly 42 cents on the dollar for the so-called exchange bonds, which were previously restructured in 2005 and 2010. Those figures are some way adrift of the bondholders’ proposals, according to Ms Morden’s calculations. The exchange bondholder group is seeking an average recovery value of 58 cents on the dollar, on a similar basis. A proposal put forward by Gramercy Funds Management, Fintech Advisory and a creditor committee involving Greylock Capital Management and GMO asks for the same for the post-2016 bonds. Meanwhile, the proposal from the BlackRock-led group, whose members hold both the exchange bonds and those issued since 2016, suggests an average recovery value of 60 cents on the dollar. A government official involved in the negotiations indicated that Argentina might be willing to make a counter offer if bondholders were to adjust their current proposals to reflect a recovery value in the low 50s.

According to a person familiar with the matter, BlackRock has discussed with other members of its group the prospect of accepting a recovery value of between 50 to 55 cents on the dollar. Market prices of various bonds have rallied in recent days amid optimism that talks had not collapsed entirely, even as default looms. In a public statement released on Monday, the group involving BlackRock said it was “hopeful that a mutually acceptable solution can be reached”. Mr Guzmán has said that the government is flexible, even though it is committed to staying within the constraints of its own forecasts. A study carried out earlier this year by the IMF concluded that Argentina’s debt was unsustainable.
 

gracielle

Registered
21 May 2020
New projections. How far will the dollar go and how could inflation close in 2020
The global crisis generated by the coronavirus pandemic, added to Argentina's pre-existing weaknesses, do not provide good forecasts for the country. According to the May report by FocusEconomics, which includes the forecasts of banks and private consultancies, in 2020 there will be a fall in GDP of 6.9%, inflation will end the year in the order of 46.3% and the official price of the The dollar will settle at $ 86.5, although it could climb to a maximum of $ 102. Today is $ 68.08 (on that price, to purchase, you must add the 30% tax)....
....For 2021, the consensus of the consultants and bank is that the dollar will be at $ 112.16, although some stretch the estimates even to $ 140.....
....The report points out the importance of solving the debt problem as an articulator of an improvement in economic indicators. "Meanwhile," he points out , the debt renegotiation saga continues: after three large groups of creditors rejected the initial restructuring proposal, with more than US $ 65 billion of debt, the government extended the negotiations until May 22, the the same day that a grace period for a debt of US $ 503 million expires. "....
 

gracielle

Registered

21 May 2020
Debt. Faced with a "soft default", the Government formally extends the negotiation
......the Minister of Economy, as confirmed by three sources to LA NACION, will publish in the next few hours, before 17 on Friday (New York time), an addendum to extend for a second time the term of negotiations with the three committees. of creditors. This time the chosen dedline is June 2....
 
Top