Argentine bondholders say country in credit 'wasteland' amid economic crises

Argentine bondholders say country in credit 'wasteland' amid economic crises

Argentine bondholder groups slammed the government on Thursday over economic policies they said were undermining investor confidence in the country, which emerged from a sovereign default in September after a $65 billion restructuring.

Two of the groups involved in that debt revamp said in a statement that policies since then had “failed to restore confidence” and instead had “dramatically worsened the country’s economic crisis.” Bond prices have dropped sharply since the exchange.

Argentina, headed for a near 12% economic contraction this year due to the coronavirus pandemic, is battling a foreign exchange crisis with dwindling reserves and a huge gap between the official peso spot rate and alternative trades of the currency.

The economy ministry and central bank have tightened capital controls this year, but have yet to calm the situation.

The gap between the official spot rate ARS=RASL of around 78 pesos per dollar and the black market ARSB= was around 143% on Thursday.

“Instead of heralding a reopening of access to markets to support Argentina’s manifest investment needs, the aftermath of the debt restructuring is a virtual wasteland for Argentine credit,” the Exchange Bondholder Group and Argentina Creditor Committee said.

The Argentine government did not immediately respond to a request for comment. But an official who spoke on condition of anonymity said the statement did not represent the general view of creditors and was pushed by a small group of holders.

The official added that dialogue with creditors was fluid and ongoing, with video conference calls in recent weeks, though admitted there were some “open wounds”.

“It’s the moment to close these wounds,” the official said.

Argentina’s center-left Peronist government, in place since last December, has this year restructured over $100 billion with private creditors and is in negotiations to defer some $45 billion owed to the International Monetary Fund.