By Adam Jourdan
BUENOS AIRES, Aug 4 (Reuters) - Argentina is battling to escape from a messy ninth sovereign default as it firefights recession, stubborn inflation and increasingly wary investors.
The country announced on Tuesday it had reached an agreement with creditors to restructure around $65 billion in foreign debt, breaking a deadlock over recent weeks and setting the stage for a formal deal later this month.
HOW WE GOT HERE
Argentina's center-left Peronist government made an aggressive initial proposal to bondholders in April that was quickly rejected.
After winding talks, the government made a "final" offer in early July, calculated to be worth near 53.5 cents on the dollar. Creditors rallied behind a counterproposal demanding around 3 cents more.
After last-ditch talks between the government, creditors and advisers, the two sides zeroed in on a deal worth around 54.8 cents, a person close to the talks said, with tweaks to legal clauses that bondholders were seeking.
The government has set a deadline for creditors to formally accept the amended proposal on Aug. 24, after which new debt would be issued in early September.
WHAT ELSE DOES ARGENTINA OWE?
Argentina has a total debt pile of $323 billion, around 90% of gross domestic product. The majority of public debt is in foreign currency.
The South American country is negotiating with the International Monetary Fund to strike a new agreement to replace a landmark $57 billion financing deal struck in 2018. Argentina has already received around $44 billion under that deal.
Argentina also owes the Paris Club creditor group $2.1 billion that was originally due in May. It has made use of a one-year extension on the payment and is looking to renegotiate the debt with the group of country lenders.
A bill to restructure the country's foreign currency debt issued under local law is currently going through Congress.
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(Reporting by Adam Jourdan; Editing by Steve Orlofsky)
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