By Cassandra Garrison and Eliana Raszewski
BUENOS AIRES (Reuters) – Bondholders urged Argentina’s Buenos Aires province to engage in “meaningful negotiations” during a deadline extension on its debt proposal, the group said in a statement on Thursday, when the grace period expires on a major debt payment.
The bondholders group, composed of 40 institutions holding more than 42% of province’s eligible debt, said an ongoing default would “further aggravate” the province’s financial situation.
Missing a $110 million interest payment would threaten default.
A spokesman for the province’s economy ministry declined to comment on the bondholders’ statement.
Provincial officials extended a deadline until May 26 after they failed to muster enough support from creditors on a restructuring proposal for $7.148 billion in debt, which included a three-year payment halt and large cut to interest payments.
The local government needs approval by holders of more than 75% of the debt to move forward with its proposal.
The bondholders group urged creditors who had accepted the province’s offer to consider revoking their consent, saying they risk forfeiting “important legal protections.”
“The Steering Committee reminds bondholders who have already consented to the exchange offer and consent solicitation that they retain the right to revoke their consents and pursue an equitable resolution alongside the Group,” the statement said.
Argentina’s federal government is locked in parallel talks with bondholders on a deal to restructure $65 billion in foreign debt and has extended the deadline to May 22 for creditors to accept its proposal.
(Reporting by Cassandra Garrison and Eliana Raszewski; Editing by Chizu Nomiyama and Dan Grebler)
