Argentina Creditors Say Debt Offer Imposes Excessive Losses

Three groups representing the majority of Argentina's creditors on Monday rejected the government's debt restructuring offer on $66 billion in bonds, saying the proposed haircut on their investment is too steep.

Argentina's Economy Minister Martin Guzman on Sunday called for creditors to cooperate with the government's efforts but the groups said they "require Argentine bondholders to bear disproportionate losses that are neither justified nor necessary."

"Each of the three bondholder groups and the institutions they represent, together with various other investors, wish to reiterate and make clear that they cannot support Argentina's recently launched exchange offer, and will not tender their bonds in such offer," the statement said.

A spokesman said the groups each represent about 100 bondholders, and hold about 60 percent of the country's debt.

The government's cabinet chief Santiago Cafiero doubled down on Monday, saying the country's offer is "the only one that can be implemented."

"We are presenting the offer in good faith, which is the commitment that we can fulfill and will be sustainable over time," Cafiero told Argentina's radio station La Red.

Guzman said Sunday in an interview with the Clarin newspaper that Argentina "has the willingness to pay, but does not have the capacity to pay," and responded to criticism of the terms of the debt swap, which is due to close Friday, saying creditors will not lose but will "gain less."

The offer to restructure the crisis-hit nation's foreign debt includes a three-year grace period, a 62 percent haircut on interest amounting to $37.9 billion, and 5.4 percent on principal or $3.6 billion.

Guzman said the lenders took the risk in extending credit to Buenos Aires and the restructuring plan is in line with the country's ability to pay.

If no deal is reached by Friday, "Argentina will continue working as long as it takes to restore debt sustainability."

The Ad Hoc Bondholder Group, the Argentina Creditor Committee and the Ad Hoc Group of Argentina Exchange Bondholders said in the statement they are "prepared to constructively engage with Argentina when its government is ready to do so, with the common objective of finding a viable solution to the Republic's current financial challenges."