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ARGENTINA - BUENOS AIRES. Argentina's government will launch a huge voluntary debt swap on Monday of peso and some dollar-linked instruments set to mature in 2024, a bid to push back repayments amid a major economic crisis hammering the South American country.
The debt, which includes 15 different instruments with a total value pegged at around $65 billion, may be exchanged for new inflation-linked instruments with maturity dates ranging from 2025 to 2028, according to the government.
"The eligible securities in the hands of the public and private sector for the swap operation amount to some 55 trillion Argentine pesos ($64.86 billion)" a government source said, adding 70% of the maturities were held by the public sector.
Argentine sovereign bonds, which have been on a rally this year driven by market hopes about new libertarian President Javier Milei's reforms and fiscal tightening, dipped on Monday an average 0.6% by around midday.
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The government will open the auction process on Monday morning and will close it on Tuesday evening. Settlement of the offers received and awarded will take place on Friday.
Milei is battling to restore economic stability with a tough austerity and cost-cutting drive, which has helped improve the fiscal balance but dampened growth and economic activity.
The grains producing country is also grappling with inflation running at over 250%, poverty that is climbing towards 60%, depleted central bank foreign currency reserves, and a myriad of currency controls to protect the embattled peso.
In an interview on Monday, Milei said his plan for a "zero deficit" this year was non-negotiable, even as he faces tough talks with lawmakers and governors to push forward his economic reform plans. He added March could be a "complicated" month.
"If we tame inflation and undo currency controls, economic activity will rebound", he told local media, adding that he aimed to unravel controls by "the middle of the year".
