Argentina Succeeds in Finalizing Debt Restructuring Agreement with Creditors

BUENOS AIRES, KOMPAS.com – On Tuesday, Argentina announced that an agreement was reached with three major creditors for debt restructuring worth $66 billion.

The breakthrough is part of the government’s measures to solve its latest sovereign default crisis.

Previously, Argentina set an Aug. 4 deadline to finalize the deal but it has now pushed the date to Aug. 24 “to give effect to the agreement.”

The agreement on debt restructuring came after months of wrangling and deadline extensions between Argentina and its creditors.

The Economy Ministry said in a statement it would adjust some payment dates and legal clauses to sweeten what had been touted as its "final" proposal made in early July, without increasing the overall principal or interest payout.

A major grain producer and once one of the world's wealthiest countries, Argentina fell into its ninth sovereign default in May and is headed for an estimated 12 percent economic contraction this year on the back of two years of recession.

"Today (we) have reached an agreement that will allow members of the creditor groups and such other holders to support Argentina's debt restructuring proposal and grant Argentina significant debt relief," the ministry said.

That included the Ad Hoc Group, Argentina Creditor Committee and the Exchange Bondholder Group, a trio which united last month to oppose a previous government offer, sparking a deadlock that threatened to derail an eventual deal.

The ministry said it would extend the deadline for creditors to formally accept the new deal to Aug. 24.

It had been set to expire on Tuesday.