Argentina

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.

International capital markets are facing a reprise of one of their most eerily familiar tales in the next month: the will-they-won’t-they tension of the run-up to an Argentina default, writes Oliver West.

BNP Paribas has hired from Standard Chartered to bolster its Latin American debt capital markets team, GlobalCapital understands.

Argentina's bonds slipped again in secondary markets after finance minister Martín Guzmán confirmed to local media that the government had no plans to pay $503m of coupon payments due on Wednesday, despite the fact the move had already been widely anticipated.

Aeropuertos Argentina 2000, the operator of 35 airports in the country, is asking bondholders for temporary relief on amortisation and coupon payments as it looks to mitigate the impact of the Covid-19 pandemic on its cash flow.

A swift, firm rejection from the bondholder group considered to hold most sway in Argentina’s restructuring negotiations effectively closed the doors on any chance of success for the government’s first offer less than one business day after it had announced terms.

After making investors wait until the end of Friday's trading session that saw a strong bid for its bonds, Argentina finally proposed terms on its mammoth external debt restructuring. With early recovery rate estimates in the 30%-35% range, investors did not even wait until the weekend was over to express their discontent.

Bondholders are expected to fight a formal restructuring proposal from the Argentine government that should arrive on Friday and proposes heavy haircuts, say market participants. Argentina’s government appears ready to play hard ball.