Government lays out timetable for debt talks and IMF visit

The government laid out its agenda for debt negotiations with private creditors on Wednesday, publishing a timetable on the Economy Ministry's website.

It arrived just hours after the lower house Chamber of Deputies approved, by ample majority, a new bill that grants the Executive broad powers to renegotiate the restructuring of Argentina's public debt, a key priority for the government of Alberto Fernández. The project, which was approved by 224 deputies, will likely go to the Senate next week.

The timetable also arrived just hours after Bloomberg had published a story detailing that the government plans to present a debt sustainability programme in February, citing three people with direct knowledge of the matter.

According to the government, Guzmán will first present a debt sustainability analysis before Congress in mid-February. At that time, the government also plans to hire a financial advisor in order finalise its offer to creditors, which will be presented early March, with a view to closing a deal later that month.

While the government presents its debt plan to Congress, an IMF technical mission will visit the country, with talks set to take place from February 12 to 14. It is the first mission team the Fund has sent to Buenos Aires since the Fernández administration took office. The Fund granted Argentina a record credit line of US$56 billion in 2018, though Argentina has only received US$44 billion to date. President Fernández has indicated he does not want to receive any more cash from IMF.

In meetings held in Buenos Aires this week, Economy Ministry officials reportedly told two investor groups that the plan will be made public soon and will be explained in detail to creditors, sources told Bloomberg on Wednesday. The plan will include guidelines on the coupons the government believes it can pay, added one of the sources.

Bondholders are searching for signs of how Argentina will engage with creditors, including the International Monetary Fund, to negotiate a new payment schedule for billions of dollars of debt the country says is currently “unpayable.” President Alberto Fernández has pointed to a target date of March 31 to resolve the issue but few details have emerged thus far.

Officials present in the meetings included Finance Secretary Diego Bastourre, Finance Undersecretary Ramiro Tosi and head of the debt sustainability management unit, Lisandro Cleri, the people said.

The press office of the Economy Ministry, headed by Martín Guzmán, declined to comment.

The meetings were held in Buenos Aires earlier this week while Guzmán was in New York to speak at an event held by the Council of the Americas and meet representatives from the IMF.

Guzmán is expected to meet IMF Managing Director Kristalina Georgieva next week, on Wednesday, February 5, on the sidelines of an event hosted by Pope Francis at the Vatican.

IMF Western Hemisphere Director Alejandro Werner said Wednesday in a presentation that the Fund was maintaining its forecasts for Argentina on hold as it expects more economic policy details to be revealed in coming weeks.

According to the AFP news agency, the country’s debt load currently stands at around US$335 billion, or 93 percent of GDP. Of that, US$44 billion is owed to the IMF, with talks on delaying repayment set to begin soon.

Calendar

The Economy Ministry's agenda for the debt restructuring process:

First week of February
The government and Economy Ministry's 'External Public Debt Sustainability Unit' makes a formal invitation for proposals to banks and agents
Economy Minister Guzmán meets with IMF Managing Director Kristalina Georgieva in Rome
Chamber of Deputies deals with the external debt restructuring bill
February 12 to 14
Government receives IMF mission team in Buenos Aires
February 12 to 17
Economy Minister Martin Guzmán presents guidelines on debt sustainability and analysis before Congress
Third and fourth week of February
Financial advisors are selected from proposals received
10-day consultation with creditors based on the guidelines for debt sustainability laid out by Economy Ministry
Report prepared based on the result of the consultation with the creditors
First week of March
Government determines final debt offer
Second week of March
Argentina submits debt proposal
Second and third week of March
Tour incorporating meetings with debt proposal investors
Third and fourth week of March
End of the offer acceptance period
Argentina will issue a statement announcing results