This is one of the funds that proved to be the most difficult in the negotiations with Martín Guzmán, Argentine Minister of Economy. Perspectives of agreement
Negotiation by debt continues to advance towards the deadline of May 22 that the Argentine Government raised.
In this urgent framework, in Olivos the counter-offers presented by three groups of bondholders this weekend are analyzed at this time.
One of those proposals was the fund BlackRock, which until now appeared as the toughest in the difficult negotiation that the Minister of Economy is carrying out Martín Guzmán.
Funds are united by debt
The proposal was accompanied by funds Fidelity, Ashmore and T. Rowe Price and includes a 2027 bond, higher coupons and shorter grace period.
The proposal, says BlackRock, will provide a relief of cash flow close to 32,000 million dollars over a period of ten years under the methodology proposed by the Argentine government.
In the market it is calculated that this offer is worth between 62 and 64 dollars for every 100 nominal, against the 40 dollars in which the original offer of Argentina would be quoted.
The counterproposal of another group of bondholders headed by Fintech and Gramercy, but with less level of detail. Fintech is the fund controlled by Mexican financier David Martínez, a partner of Grupo Clarín in Telecom / Cablevisión, La Gaceta says.
Recently, at the end of last week, Martín Guzmán commented on some details about the progress in the negotiations.
Guzmán’s proposal was seen as too harsh by most creditors.
BlackRock Offer Details
The bottom BlackRock proposes that current bondholders be offered six new series of new dollar-denominated bonds and another six euro-denominated bonds.
The new Bonds offered in exchange for Macri Bonds (issued as of 2016) and Exchange Bonds (those of the Exchange 2005 and 2010) will be issued under the same legal frameworks of origin, with certain additional modifications.
Negotiation for the debt: the Government received symbolic support from the IMF.
Average Coupon: The proposal involves an average coupon reduction of 30% of a contract rate from 7% to a rate of 4.5%.
The bonus to 2027: interest ranges from 0.25 to 4.25%.
The 2036 bond: interest from 1.25 to 5.85%
The 2047 bond: interest from 1.25 to 6.35%
2039 bonus: coupon from 1.25 to 6.95%
2043 Bonus: 1.25 to 5.25% bonus
In all cases the first coupon is paid in 2021 and there is a payment in kind (bonds) for the capitalized interest.
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