Argentina’s government sent a bill to Congress late on Thursday night laying out its plans to restructure public debt in dollars issued under local law, offering creditors new instruments in both foreign currency and pesos.
The process to revamp the local-law debt is running in parallel to tense negotiations with international creditors to restructure $65 billion of the nation’s foreign-law bonds, with a deadline for creditors to accept a “final” offer on Aug. 4.
The government, which is battling with a deep recession and already in default on bond payments, has previously said that holders of local-law dollar debt would receive equitable restructuring conditions.
“This proposal is in line with the offer to restructure the public securities of Argentina … issued under foreign law, including options in pesos for certain eligible instruments,” according to the bill’s text seen by Reuters.
“If holders (of the debt) choose not to accept this exchange invitation, then interest service payments and principal repayments will continue to be deferred until December 31, 2021,” the government added in the document.
The draft law, which would see the new bonds be issued on Sept. 4, must now be approved by Congress.
Argentine Economy Minister Martin Guzmán emphasized on Thursday that the government’s proposal to holders of its foreign-law debt was the “maximum effort” the country could make and that the decision was now in the hands of creditors.
“We have a very strong commitment to reach an agreement. We seek to avoid confrontation with creditors and we have done the best that could be done,” Guzmán said at a business event.