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Argentina and its creditors are locked in talks to revamp a
foreign debt pile that has become unsustainable. The major
grains producer last week failed to make around $500 million of
bond payments, marking its ninth sovereign default.
Buenos Aires unveiled an amended proposal on Thursday with
slightly earlier maturities and a shorter two-year grace period
on coupon payments, after it earlier knocked back a new
counter-offer from two key creditor groups.
The South American country's economy minister said the new
proposal from bondholders had been a step in the "right
direction", but still fell short of what the country needed to
dig itself out from its debt crisis amid a lengthy recession.
Analysts said the latest development was a promising sign, with
Argentina's amended proposal increasing its value closer to what
creditors may accept.
"More work is still needed yet the two sides are getting ever
closer," Morgan Stanley said in a note, where it calculated the
net present value (NPV) of the new offer to be around 41.5 cents
on the dollar, up from 33 cents in the original offer.
"An NPV of 41.5 is a decent improvement and gets much closer to
the 45-50 area where we think that a deal can be reached," the
investment bank said, adding one could be reached in the third
quarter of the year with "further goodwill on both sides".
Argentina had extended a deadline for the ongoing talks to June
2, though people close to the negotiations say it's quite
possible that the cut-off will be pushed back once more.
(Reporting by Adam Jourdan and Marc Jones; Editing by Hugh
Lawson)
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