US banks shift from US$20-billion Argentina rescue, WSJ says

US banks are putting a plan for a US$20-billion bailout for Argentina on the back burner and pivoting to a smaller US$5-billion short-term financing facility, the Wall Street Journal reported.

The bailout, which was supposed to be helped by JPMorgan Chase & Co, Bank of America Corp and Citigroup Inc, has been put on ice, the Journal said Thursday. Lenders are instead working on a plan for a roughly US$5 billion short-term repurchase facility, where the country could exchange an investment portfolio for dollars from the banks.

The repo arrangement would help Argentina cover a US$4-billion debt payment early next year, after which it would look to raise billions of dollars through a bond sale and pay off the repo loan, the Journal said.

President Donald Trump’s administration had sought to support the Argentine economy, offering a lifeline in a bid to support President Javier Milei. The deal included a currency swap line for US$20 billion with the US Treasury and a separate facility for $20 billion that would be financed by banks and other institutions.

Milei’s party scored a resounding win in crucial midterm elections earlier this year. After the victory, JPMorgan Chief Executive Officer Jamie Dimon said the US$20-billion in financing “may not be necessary.” He said that if the country needed special financing, the private sector was “all ears.”

The US Treasury Department didn’t immediately respond to a request for comment.

— With assistance from Daniel Flatley