Argentina will offer investors the chance to swap their holdings of local debt for new bonds, in an attempt to assuage fears of a default on the government’s growing local debt obligations.
The Minister of Economy, Sergio Massa, said the government orwill offer investors two redemption options to exchange local bonds maturing in the second quarter. The government seeks to build the local bond curve through 2024 and 2025, Massa said in a video-streamed statement.
Debt super-swap: time bomb or big move by Sergio Massa?
In his comments, Massa said that The Government wants to leave behind the idea that Argentina is always weeks away from a default, and that this will allow any uncertainty to be cleared up by 2023.
What is Argentina’s debt in local currency
Argentina has some 6 trillion pesos (US$30 billion) in local currency debt maturing in the second quarter.
As investor uncertainty mounts ahead of the presidential primaries in August and general elections in October, the administration of President Alberto Fernández is trying to swap the securities for longer maturities to avoid low refinancing rates near the elections.
Economists from Argentina’s main opposition coalition have previously criticized the plan, saying it would only aggravate the fiscal problems of the new administration that will take office in December.
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