“Interest will be paid at maturity, while amortization will be postponed, in this instance until September 30 of the current year,” the economic portfolio said in a statement on February 11.
The ministry adopted this decision to save time and be able to restructure the bond “in a manner consistent with the rest of the external debt restructuring.”
This measure does not affect holders who had less than $ 20,000 in this instrument as of December 20, 2019, so they will collect the payment of capital on February 13.
“The logic behind this decision is simple: who treated the dual AF20 as a dollar bond will receive the treatment that is being given to the dollar debt, while who treated or seeks to treat it in the future as a bond in pesos, you will receive a consistent treatment, “explained the economic portfolio.
The AF20 bond was issued by the management of former President Mauricio Macri (2015-2019) on July 13, 2018 “in the context of what was already a deep economic, exchange and debt crisis, potentially binding the bond payments to the evolution of the dollar, which is what establishes the dollar linked component of this dual bond, “said the ministry led by Martín Guzmán.
97% of those who adhered to this instrument did so in dollars, so that “an unsustainable situation” worsened, which deepened “the macroeconomic imbalance” with the depreciation of the Argentine peso, which led to the increase in debt tied to the AF20 bonus.
The ministry acknowledged that there was hardly a 10% adherence to the exchange offered on February 3 to try to “change the profile of this unsustainable bond for another that was sustainable.”
Local creditors collaborated but not foreign investment funds, which were only willing to accept another bond tied to the dollar in a very short time, “what this government considers incompatible with the comprehensive strategy of restoration of debt sustainability” , warned the wallet.
The Alberto Fernández Executive stressed his rejection of “Argentine society being held hostage to international financial markets” and said he will not favor “speculation about the welfare of the people.”
Congress passed a law last week that grants powers to the Ministry of Economy to negotiate and restructure external public debt.