Argentina Submits Offer to Paris Club for $10 Billion Debt

Argentina formally presented an offer to settle about $10 billion it owes to the Paris Club of creditors, 13 years after the country’s record $95 billion debt default, the spokeswoman for the group of creditors said.

Paris Club members on Jan. 22 will discuss the offer delivered today by Argentina’s Economy Minister Axel Kicillof to Paris Club Chairman Ramon Fernandez, Clotilde L’Angevin, the club spokeswoman, said in a telephone interview from Paris. Fernandez, also the head of France’s treasury, will brief other club members on Argentina’s proposal, she said today, adding they aren’t expected to make an immediate official response.

“Argentine officials presented some main principles that could serve as a basis for repayment proposals that Argentina can make to the club,” L’Angevin said. “The meeting was short, between one, two hours and is not part of a negotiation process.”

Kicillof submitted the plan along with Hernan Lorenzino, a former economy minister who now heads Argentina’s Debt Restructuring Unit. About $4 billion of interest and penalties on the debt could be forgiven, and the country would pay slightly more than $6 billion, Buenos Aires-based newspaper Ambito Financiero reported today, citing officials it didn’t identify. L’Angevin declined to comment on the terms of the restructuring proposal.

Full Repayment

The Paris Club, a group comprising of 19 countries, expects full repayment and won’t accept a reduction in the amount owed by Argentina, a person briefed on the matter said. Neither side revealed details of the proposal.

Earlier today, Argentine Cabinet Chief Jorge Capitanich told reporters in Buenos Aires that Kicillof would deliver a proposal “in line with the country’s national interest and its repayment capacity.” Without saying the offer would include a discount, he said “that Argentina saved $82 billion after restructuring its 2001 defaulted debt.”

Today’s meeting was highly positive and consolidated the possibility of advancing negotiations, Argentina’s Economy Ministry said in statement. Kicillof will hold a press conference on the meeting after he returns from France tomorrow, the ministry said.

Argentina’s global 2017 bond gained 0.1 percent to $85.72 at 4:05 p.m.

Investor Confidence

Seeking to attract foreign investment and reverse a dollar drain that’s sent foreign reserves to a seven-year low of $29.8 billion, Argentina is trying to regain investor confidence. This includes restoring the International Monetary Fund’s confidence in the country’s economic data and reaching an agreement with bondholders, including billionaire Paul Singer, who own defaulted debt.

Argentina will publish a new consumer price index next month after becoming the first country to be censured by the IMF for reporting inaccurate economic data.

The origin of the Paris Club dates back to 1956 when Argentina first met its public creditors in Paris. Since then, the Paris Club has reached 429 agreements with 90 different debtor countries. Since 1956, the total debt of Paris Club agreements amounts to $573 billion.

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