Argentina's Buenos Aires 'very confident' of $7 bln debt deal, minister says

Argentina's Buenos Aires province has support from the majority of its creditors for a planned $7 billion debt restructuring, provincial finance minister Pablo López told Reuters on Monday, despite pushback from some bondholders.

Argentina's Buenos Aires province has support from the majority of its creditors for a planned $7 billion debt restructuring, provincial finance minister Pablo López told Reuters on Monday, despite pushback from some bondholders. López said the province would formalize the debt exchange offer to creditors in the coming days and that it expected to reach the necessary threshold of creditor support to successfully restructure the debt.

"We are very confident of reaching the majorities that are required," said López. The province said last Wednesday it had struck a breakthrough agreement in long-running talks with main creditors to restructure its international debts, though some bondholders said they had not endorsed the deal.

Reuters reported on Friday, citing a source close to the talks, that the province was confident of a high acceptance for its offer despite pockets of opposition. The province has said the new offer would imply a total reduction in debt service payments of some $4.45 billion between 2020 and 2024, while average payment coupons would be reduced to 5.6% and payment terms extended significantly.

"Starting from restructuring the debt, this is going to give us great relief in the short and medium term," said Lopez. "We achieved a maturity profile that makes maturities sustainable and are in accordance with the payment capacity of the province," López said.

Provincial bonds, while still heavily discounted, have been on the rise in recent weeks on hopes over a deal. The region, around the capital city of the same name, is the most populated and richest province in Argentina. Argentina's national government, which restructured over $100 billion in foreign debt last year, is also locked in talks with the International Monetary Fund to revamp some $45 billion it owes and cannot currently pay back amid a lengthy recession.

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