Argentina Reaches IMF Agreement to Restructure $44.5bn Debt

Argentina reached an agreement with the IMF to restructure around $45bn of debt. The announcement came before the deadline of a $730mn payment to the IMF, which was due last Friday. As part of the 10-year financing plan, Argentina agreed to gradually reduce its primary fiscal deficit from 2.5% of GDP to 0.9% in 2024 and to slow its Central Bank money printing down to 1% of GDP this year and “close to cero” in 2024. Additionally, no spending cuts will be made, including energy subsidies. There will be a 4.5Y grace period before the debt repayments begin. The restructuring still needs to be approved by the IMF’s board of directors and confirmed by Argentina’s congress. IMF’s officials said that agreement “on key policies” had been reached, a final staff-level agreement is still pending. Fund staff would continue working with their counterparts in Buenos Aires “in coming weeks.”

Argentina´s USD bonds were slightly up with its 1.125% 2035s up 0.48 to 28.775, yielding 11.84%

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