Argentina starts a $65B bond swap to defer 2024 debt payments

On Monday, Argentina’s government is set to commence a substantial voluntary debt swap involving peso and certain dollar-linked instruments due to mature in 2024. This initiative aims to maneuver repayments in the face of a severe economic crisis impacting the South American nation.

The debt in question, comprising 15 distinct instruments valued at approximately $65 billion, could undergo a swap for novel inflation-linked instruments with maturity dates spanning from 2025 to 2028, as announced by the government. Notably, Argentina initiates a $65 billion bond swap in a strategic move to address its economic challenges.

Argentina initiates a $65 billion bond swap

A government source revealed that eligible securities, held by both the public and private sectors, for the swap operation, total approximately 55 trillion Argentine pesos ($64.86 billion). Notably, around 70% of the maturities are currently under the control of the public sector.

The forthcoming auction process, set to commence on Monday morning, will span until Tuesday evening. The culmination of this operation, including the settlement of received and awarded offers, is scheduled for Friday.

Javier Milei’s Austerity Drive for Argentina’s Economic Revival

Argentina initiates a $65 billion bond swap

The newly elected President of Argentina, Javier Milei, a libertarian, is undertaking a formidable task to restore economic stability through a stringent austerity and cost-cutting program. Despite its positive impact on fiscal balance, this strategy has led to sluggish growth and reduced economic activity.

In the midst of these challenges, Argentina initiates a $65 billion bond swap, adding another dimension to its efforts. The nation, known for its grain production, grapples with a myriad of economic issues, including inflation surpassing 250%, a poverty rate approaching 60%, depleting central bank foreign currency reserves, and the implementation of various currency controls to protect the beleaguered peso.