Argentina creditors close ranks over debt deal as government digs in

Credit: REUTERS/Agustin Marcarian

By Adam Jourdan and Karin Strohecker

BUENOS AIRES/LONDON, July 20 (Reuters) - Argentina's three main creditor groups closed ranks on Monday, hardening their opposition to the government's latest debt restructuring offer and making a new joint counterproposal of their own, the first time the trio have combined.

The two sides are racing to reach an agreement to revamp around $65 billion in foreign debt ahead of an Aug. 4 deadline,looking to avoid a messy and protracted legal standoff after recession-hit Argentina slipped into default in May.

Argentina's government made a "final" offer in July after talks had earlier broken down. Center-left President Alberto Fernandez and Economy Minister Martin Guzman have since repeatedly said it was the maximum the country could offer.

The three committees - the Ad Hoc group, Argentina Creditor Committee, and Exchange Bondholder Group - said their new proposal made "significant economic and legal concessions", adding they had agreed to oppose the government offer.

"Our three groups have also signed a cooperation agreement reaffirming that Argentina's current offer falls short of a proposal that can be supported by the creditor groups," they said, adding they would not tender their bonds under the offer.

The unified opposition from the groups, who together hold more than a third of both Argentina's "global" bonds and its "Exchange" bonds, make it unlikely the government could get a comprehensive deal on its current offer.

The groups added, however, that a deal could still be struck.

"We are confident that a consensual resolution is in sight and that such an agreement will provide a path towards a sustainable economic future for Argentina's people," they said.

The three groups did not give details of their new proposal but said that it included an "amended version of the 2016 indenture" for eligible global bonds, a reference to the key legal clauses that have been a point of contention.

Argentina's Economy Ministry declined to comment.

The country's sovereign bonds, which have been buffeted since last year over concerns of a default, edged down 0.5% on Monday. They have risen over recent months on hopes of a deal.

(Reporting by Adam Jourdan and Karin Strohecker; Additional reporting by Cassandra Garrison, Jorge Otaola and Rodrigo Campos in New York; Editing by Cynthia Osterman and Jonathan Oatis)

((adam.jourdan@thomsonreuters.com; +54 1155446882; Reuters Messaging: adam.jourdan.thomsonreuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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