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Crafty_Dog:
https://clarionproject.org/why-hezbollah-is-in-argentina/

Crafty_Dog:
https://noticieros.televisa.com/historia/anciano-88-mata-ladron-28-intento-asalto/?utm_medium=ONESIGNAL&utm_source=SITE&utm_campaign=PUSHNOTIFICATION

Crafty_Dog:
Stratfor Worldview
In Argentina, Another Default Looms Ever Larger
4 MINS READ
Feb 20, 2020 | 21:52 GMT
HIGHLIGHTS
The IMF's latest assessment of the Argentine economy has sent a clear message to the country's many creditors: Get ready for a significant -- and likely painful -- debt restructuring....

The Big Picture

Argentina's economy is in a recession. And after several years of debt-fueled fiscal deficits, the country is also now on the brink of its ninth default. President Alberto Fernandez has attempted to satisfy voters by increasing public spending. But this has come at the cost of maintaining a budget surplus to ensure its debt is sustainable.

See Economics
What Happened

In a Feb. 19 public statement, the International Monetary Fund (IMF) said Argentina's debt was unsustainable, and that the primary surplus required to reduce its public debt was neither "economically nor politically feasible." In its June 2019 review of Argentina's aid program, the IMF noted a primary fiscal surplus of 3.5 percent was needed to stabilize the country's debt as a percentage of gross domestic product (GDP). The IMF also projected a gross external financing requirement of more than $90 billion for Argentina in 2020. But a closer reading of the IMF's quantitative projections behind those previous assessments revealed that a heroic fiscal adjustment should have been undertaken to substantially mitigate Argentina's debt, which the IMF said has since "deteriorated decidedly." As a result, the IMF called on private bondholders to enter “collaborative” negotiations with the Argentine government to restructure its debt.

Why It Matters

By recognizing the country's economic reality, the IMF is setting the stage for what could eventually be a large-scale debt restructuring, provided Argentina also takes actions to stem the fiscal deficits driving its debt problem. Creditors have likely been preparing for major losses in their Argentine investments, given that the country's debt was already priced at distress levels in secondary markets. But the IMF's new sobering assessment announcement has likely put Argentina's bondholders on official notice that a full-scale reorganization of debt is coming — and with it, a substantial cut to their investments.

The Argentine government will likely weaponize the IMF's new assessment to justify a significant restructuring of its debt and make unreasonable demands of its foreign creditors. Earlier this week, Vice President Cristina Fernandez de Kirchner called on the IMF to write-off part of its outstanding $45 billion in loans to the country. The IMF, however, promptly rejected this proposal. Convincing creditors that recognizing losses is a worthwhile endeavor would require a credible and comprehensive economic program that shows Argentina is on a realistic path to debt sustainability. Without that assurance, the country's foreign creditors are thus unlikely to accept such a restructuring. Unlike in a domestic bankruptcy proceeding, the IMF cannot order a "standstill," nor can it force terms on creditors.

The IMF has sent a clear message to Argentina's many creditors: Get ready for a significant — and likely painful — debt restructuring.

Moreover, the IMF statement didn't discuss the amount of fiscal retrenchment that such an adjustment would require from Argentina. As such, it remains to be seen just how much of the burden will fall on creditors, which could further stymie the process. The IMF statement could also embolden holdouts among bondholders that refuse to participate in a debt exchange and demand full payment, as with holdouts from the 2005 bond swap, precluding a critical mass of acceptance under collective action clauses in bond contracts.

Background

Argentina has defaulted on its external debt payments eight times in its history. Still, after defaulting in 2002, engaging in a controversial bond exchange in 2005, and not paying recalcitrant creditors until 2016, Argentina again borrowed heavily in global financial markets. As a result, Buenos Aires again began to struggle to make payments in 2018, prompting the IMF to support a lending program. In accordance with the IMF program, Argentina's previous government began to implement a small degree of fiscal discipline. But the unpopular cuts to public spending ultimately resulted in the election of a populist government in late 2019.

Crafty_Dog:
HIGHLIGHTS
Argentina's debt restructuring negotiations with creditors appear stuck, but the recent extension of the country's self-imposed deadline for talks with private debt bondholders keeps alive the possibility of reaching some form of a long-term deal. Ultimately, however, debt restructuring will not by itself change the fiscal and monetary policies that...

The Big Picture
Argentina has formally entered its ninth sovereign debt default in its history, but negotiations with creditors are still ongoing to prevent this default unraveling into a larger economic crisis that could again push the South American country down a populist and nationalistic path.

See Economics
Argentina's debt restructuring negotiations with creditors appear stuck, but the recent extension of the country's self-imposed deadline for talks with private debt bondholders keeps alive the possibility of reaching some form of a long-term deal. Ultimately, however, debt restructuring will not by itself change the fiscal and monetary policies that initially led to Argentina overborrowing. Whether the country's default again transforms into another full-fledged economic crisis will instead hinge on its government's willingness to reach a compromise with bondholders, as well as produce a credible, long-term economic growth plan that remedies the country's currently untenable levels of public spending.

Argentina's prolonged tango with international investors and private sector creditors is about to reach a crescendo in which capital markets will either intensify their embrace with Buenos Aires, or move into a prolonged rift that would be costly for both sides.

On May 22, Argentina officially entered its ninth default on international debt after failing to make a $503 million interest payment on Eurobonds by the end of a contractual 30-day grace period.
Argentina was already in default on dollar-denominated domestic debt, on which it unilaterally declared a moratorium on April 6.
On May 14, the province of Buenos Aires also defaulted on $7 billion in debt when it missed a $150 million payment.

President Alberto Fernandez's administration has yet to present a long-term economic plan, and instead seems to be betting on a debt deal that will give some reprieve to public finances.

On April 17, Argentina proposed an initial debt restructuring deal that as many as 80 percent of investors in Eurobonds totaling $66.2 billion have rejected.
Bondholders presumably found the original proposal, which Buenos Aires says is still on the table, objectionable because Argentina would capture nearly all of the existing secondary market discount of 65-70 percent through a 5 percent “haircut” on principle, as well as a 62 percent reduction in the value of interest payments with no payments to creditors for three years.
Argentina's proposal also lacks a “menu” of alternative options from which creditors could choose from to provide equivalent debt relief via a mix of par bonds with reduced interest or discount bonds with higher interest rates.
The draft deal includes very low long-term economic growth assumptions as well, which creditors deem as very conservative.
Argentina recently extended its debt restructuring negotiations with creditors until June 2, but is giving conflicting signals about what kind of new proposal it is ready to present, if any.

Economy Minister Martin Guzman says the country is waiting for creditors to further modify their proposals to bring them closer to Argentina's request to delay any payment until 2024, which is unlikely.
But in a May 22 interview with Reuters, Guzman also indicated that some revisions to the draft deal could be forthcoming, which may include concessions on Argentina's proposed interest rate cut that Argentina, as well as some modest payments.
Three groups of bondholders have presented counteroffers to Argentina's original April 17 proposal, which still suggests a willingness from both parties to negotiate in good faith and the existence of some common ground. This, combined with the continuation of talks and the lack of public acrimony that characterized previous negotiations, signal that there is ground for some compromise that could provide the basis for a settlement where the latest missed payments would be only a hiccup in Argentina's long debt saga. A potential agreement may include:

A grace period on all payments of less than three years, perhaps with small interest payments that increase over time and a shorter overall maturity for when final payments are due.
Compromises on the overall amount of the “haircut” or reduction in the present value of cash flows.
Allowing creditors to choose between par bonds, discount bonds or interest reduction bonds.
A proposal by a minority group, mainly holding previously restructured debt from 2005, for GDP-linked contingencies in which creditors could conceivably recover higher amounts if the economy does better than now projected.
Avoiding another full-fledged crisis after Argentina's latest default will hinge on whether its government can produce a credible economic growth plan and reach a debt restructuring deal with bondholders.

However, there are still obstacles that could complicate the final success of a debt restructuring agreement between Buenos Aires and bondholders.

Some hard-line bondholders could decide to hold out from any deal that the majority of the private lenders agree with Argentina.
Argentina and creditors could also fail to agree on what a credible long-term economic recovery plan for the country, and the Argentine's government willingness to present one in the first place.
But even with a deal, Argentina's future economic prospects remain dire.

Due to the fallout from the COVID-19 pandemic, the Argentine economy is expected to contract by more than five percent in 2020.
The global oil price crash has complicated Argentina's plans to continue exploiting the shale-rich area of Vaca Muerta, which requires reference oil prices upwards of $45 per barrel to be viable.
Tensions with neighboring Brazil and an initially protectionist outlook from Argentina complicate the possibility of the Common Market of the South (Mercosur) successfully negotiating more free-trade agreements that would expand export markets for Argentina, as well as the rest of the region.
Avoiding a prolonged default and the subsequent financial crisis will thus also require deft management of the economy, as well as the involvement of key external institutions, such as the International Monetary Fund.
 
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