Argentina recruits leading banks to help restructure debt

March 5, 2020

BUENOS AIRES — The Argentine government recruited three major banks to guide a massive debt restructuring as the country seeks to emerge from an economic crisis, the economy ministry announced Wednesday.

The institutions designated as underwriting banks are the Bank of America, HSBC and Lazard, which has been retained as a financial advisor.

Argentine President Alberto Fernandez, who took office in December, is seeking to renegotiate $195 billion of its $311 billion foreign debt.

That includes a deeply unpopular $57 billion bailout loan from the International Monetary Fund negotiated by Fernandez's center-right predecessor Mauricio Macri in 2018.

Fernandez has refused the final $13 billion disbursement of the loan, leaving Argentina's exposure at $44 billion.

The IMF concluded in a report last month that Argentina's debt was 'not sustainable' and urged the government to generate funds from private investors.

Argentina's economy shrank by 2.1 percent in 2019. The country has been in recession since mid-2018 as poverty and unemployment rise, with inflation surpassing 50 percent over the last year.

An IMF mission has been in Argentina since Monday. The government said it intends to present an offer to private bondholders this month, while continuing talks with the IMF.

The economy ministry has asked holders of external debt bonds 'to report their identities and holdings in order to facilitate communication.'

The objective, it said, is to 'contact as many holders as possible to establish relationships and know their opinions.'