Debt restructuring talks for Buenos Aires Province stall

After nearly a year of extending the deadline of its debt restructuring proposal, fresh documents published by Argentina’s largest province show talks remain stuck.

The province of Buenos Aires presented the details of a proposal shown to one of its largest creditors, GoldenTree Asset Management, under a nondisclosure agreement which has since expired, according to a statement posted online. The province says that GoldenTree rejected the offer and proposed a counteroffer that it viewed as “a material digression from terms that the Province could consider meaningful.”

The statement follows a lack of progress in debt talks to renegotiate about US$7 billion of the province’s overseas debt, more than six months after the country struck a deal to restructure US$65 billion in bonds. A half dozen other provinces, from Salta in the north to Neuquén in the south, have sealed restructuring deals of their own since then.

The province’s standing debt offer remains the one it originally published last April, which is set to expire on March 26. Buenos Aires Province has languished in default for nearly a year, after it missed a $150 million bond payment in May.

In its latest update, the province proposed moving forward the maturities on the new bonds to 2031 and 2039, from 2032 and 2040 previously. Coupon payment of dollar and euro-denominated bonds in the updated package are set to start at one percent for all of the notes and go as high as to 5.95 percent for one of the notes. Principal payments start as early as December 2024.

That update represents a net present value of around 65 cents on the dollar at a 10 percent exit yield, higher than the 50 cents on the dollar it originally offered, according to Pablo Waldman, head of strategy at StoneX Argentina. That’s still far from other provincial restructurings, which have closed their own negotiations with NPVs near 90 percent, he added.

“I expect another deadline extension and more complicated talks to try to find common ground,” Waldman said from Buenos Aires. “This is far from over.”