Argentina in defaults as talks with bondholders continue

Argentina is on course for a technical default after failing to pay 503 million U.S. dollars in interest payments on Friday as the country continues to talk with creditors to restructure its 66-billion-dollars debt.

Argentina has officially pushed the deadline for a deal to June 2 to reach an agreement with bondholders, said Economy Minister Martin Guzman, adding that there may be possible modifications to the initial proposal made by the government, which includes a 62 percent reduction on interest and a new grace period of three years.

The Argentina’s ambassador to the United States, Jorge Arguello, confirmed the country’s failure to make the payment on Friday while discussing an imminent agreement with creditors.

“In the face of reaching an agreement with its creditors on the new terms of its bonds, Argentina will defer this payment until it reaches an agreement with creditors and new terms are concluded over the interest to be paid on the said bonds,” said Arguello.

The U.S.-based ratings agency Moody’s said Argentina’s default is “consistent” with its current CA credit rating, adding that “looking ahead, Moody’s anticipates that the outlook for Argentina’s debt restructuring will most likely become more complicated.”

Argentinean economist Horacio Rovelli told Xinhua that despite the non-payment, the country will not face “immediate legal consequences, given current negotiations with private creditors.”