Buenos Aires (AFP)

After more than three months of tough negotiations, the Argentine government announced on Tuesday that it had reached an agreement with its creditors for the restructuring of $ 66 billion in debt.

Argentina has reached an agreement with the three groups of creditors who have so far refused its offer, which constitutes "a significant relief" for the country, the Argentine Ministry of Economy said in a statement, while the date limit of negotiations was set for Tuesday 9:00 p.m. GMT.

"Argentina will adjust certain payment dates" from the government's original offer, which involves payments in January and not March of each year as originally planned, the statement said.

The three groups of creditors - Exchange Bondholders, Ad Hoc and Argentina Creditor Committee - had refused at the end of July the latest proposal from the government of President Alberto Fernandez for this restructuring.

Discussions, underway since April 20, concerned bonds dating from 2005 and 2010, products of a previous restructuring, as well as new securities issued from 2016.

Buenos Aires notably proposed to pay $ 53.5 in recovery for every $ 100 of the face value of the bonds. Creditors demand $ 56.5.

The new agreement provides for the collection by creditors of more than $ 54 per 100, and improves payment times, an official source told AFP.

This improvement makes it possible "to advance payments without yielding to economic benefit," analyst Sebastian Maril told AFP.

"The economic question is resolved, it remains to see the legal aspects in detail," he adds.

- Bad posture -

This agreement is the result of three months of particularly tense discussions. All three groups of creditors announced last week that they were turning down Argentina's offer.

They threatened to exercise their right of veto, claiming to represent more than half of the holders of bonds issued under foreign law.

Despite the disagreements, the government and the creditors had made it clear that they wanted to avoid the consequences of a prolonged default.

Argentina had in fact been in default since May 22, when the interest payment of $ 500 million was due on three of the bonds under discussion. Despite the default, negotiations continued.

Last week, the South American country failed to honor the payment of an additional $ 600 million in interest on two other bonds undergoing restructuring.

Argentina is in bad shape with inflation of over 50% over the year and a record poverty rate.

Argentina's total debt stands at $ 324 billion, or 90% of GDP.

Argentina's economy has been in recession since 2018 and will suffer even more this year due to the Covid-19 pandemic, with an announced contraction of 9.9% of Gross Domestic Product, according to the latest forecasts from the International Monetary Fund.

The country must also negotiate a new program with the IMF from which it has subscribed a loan of 57 billion dollars, of which 44 million have actually been disbursed.

Another thorny issue, the debt issued under national legislation of $ 41.7 billion, whose payments have been deferred to December 31, 2021.

© 2020 AFP