Argentina

Argentina said on Monday evening that a new proposal to creditors was imminent after the government again extended the participation deadline in its restructuring. Optimism continues to grow over the chances of an agreement — even as an IMF statement on the process triggered forthright responses from bondholders.

Argentina officially entered default for the ninth time on May 22 as the grace period expired on $503m of overdue coupon payments. However, there is increased optimism that the sovereign will reach an agreement with bondholders after the largest creditor group said “direct and immediate discussion” was required.

Argentina is set to enter default on its international debt for the ninth time on Friday, but the sovereign curve performed well this week as investors and analysts say that creditors will continue negotiations well after the grace period on $503m of coupon payments expires.

Only in Argentina could a finance minister claim that default on billions of dollars of bonds constitutes merely an “anecdotal date”.

Analysts expect negotiations between Argentina and its foreign bondholders to continue past May 22, the date that the sovereign could enter default, with restructuring proposals from the creditors implying recovery values up to 50% higher than what the issuer initially proposed. But as both parties appear to be keen to find a solution, the bonds continued their rally on Monday.

Argentine authorities were understood to be weighing up debt restructuring proposals from several bondholders on Sunday evening as default looms large for the South American sovereign.

The Province of Buenos Aires (PBA) legally entered default this week amid pleas from its creditors for serious restructuring negotiations. But Argentine sovereign bondholders are still holding out hope that they may come to an agreement with the national government.

Argentina’s turnaround under former president Mauricio Macri turned out to be a castle built on sand. But as the country heads towards default, the slick execution of its bond market fairytale between 2016 and 2018 could show the Fernández government how to handle investors.

The Argentina turnaround story under former president Mauricio Macri turned out to be a castle built on sand. But slick execution of the country’s two year bond market fairytale between 2016 and 2018 can provide the new government with some guidance in dealing with investors now it is staring down the barrel of default.

Argentina’s dollar bonds climbed again on Monday after the issuer extended the deadline for a restructuring offer, as a change in tone from the government offered slight hope that an agreement can be reached.

Argentine government bonds have sold off yet again as neither creditors nor the government appear willing to blink in a stalemate that is likely to lead the sovereign to default on May 22, when the grace period expires on $500m of bond payments.

Bondholders and analysts said that the Province of Buenos Aires had offered slightly better terms than the Argentine sovereign with its distressed debt exchange, but the offer, for $7.148bn of debt, is still likely too aggressive to gain traction with investors.