BUENOS AIRES, Argentina (AP) — Argentina announced Tuesday that it will delay paying principal on a peso-denominated bond that had been due this week while it works on restructuring an overall debt it says is unpayable at a time of economic hardship.
The announcement by the Economy Ministry comes ahead of'debt restructuring talks with a mission from the International Monetary Fund.
The ministry said payment of principal on the AF20 bond, which was issued in July 2018, will be put off until Sept. 30 "to be able to count on more time to be able to restructure this bond in a form consistent with the rest of the external debt restructuring. The payment had been due on Thursday.
It said it will continue to pay interest.
The center-left government of new President Alberto Fernández is attempting to restructure a foreign debt of some $100 billion, roughly half of which is owed to the IMF.
Economy Minister Martín Guzmán has warned that Argentina needs “a sustainable solution” to paying its debt.
“Today the situation is critical, the debt burden cannot be sustained," he said last month.
Argentina periodically faces financial crises and liquidity problems that have led it to refinance its debt. At the end of 2001, it declared a record default on just over $100 billion in debt during the worst economic crisis in its history. It is currently dealing with a contracting economy, high inflation and a weakened currency.
The bill would declare the sustainability of external public debt a “priority” and authorize the government to carry out a "restructuring of interest maturity services and capital amortization of public securities issued under foreign law." It would give the executive branch power to determine the nominal amounts.