As of September 30, 2021, Argentina‘s gross public debt totaled $342.6 billion, an increase of 2.1% compared to December 31, 2020.
The linked debt indexed to the CER and that denominated in national currency represented 26.1% of the total gross public debt, while that denominated in foreign currency represented 73.9 percent.
During the nine-month period ended September 30, 2021, the Ministry of Economy made 25 public acquisition offers, including securities issues within the short-term bill program, long-term bonds (including bonds indexed to the CER and linked to the dollar), as well as liability management operations that extended the average maturity of short-term debt.
As of September 30, 2021, the stock of short-term bills (Ledes, Lecer and Lepase) amounted to 19.2 billion dollars compared to 9.1 billion dollars as of December 31, 2020.
More recently, on March 3, 2022, the Argentine government and the IMF announced that an agreement had been reached.
In general, this staff-level arrangement is based on the IMF’s Extended Facility Facility Program (the “Program”), which includes 10 reviews to be conducted quarterly over two and a half years.
The first disbursement would be made once the Program has been approved by the IMF Board. The remaining disbursements will be made after each review.
The repayment term for each disbursement is 10 years, with a grace period of four and a half years, starting in 2026 and ending in 2034.
Public debt
However, the IMF reported that this agreement was still pending approval by the IMF Board after the Extended Fund Facility. The program had been approved by the Argentine Congress.
Then, on March 17, 2022, the National Congress passed Law No. 27,668, which was later enacted on March 18, 2022, through Decree No. 130/2022.
On March 25, 2022, the IMF Executive Board approved a 30-month extended arrangement under the EFF for Argentina for $44 billion, allowing the authorities an immediate disbursement of $9.656 million.
Broadly speaking, the EFF agreement aims to provide Argentina with balance of payments and budget support backed by measures designed to strengthen debt sustainability, address high inflation, increase reserves, address the country’s social and infrastructure gaps and promote inclusive growth.
The program also aims to strengthen public finances and begin to reduce persistently high inflation through a multi-pronged strategy that involves the gradual elimination of monetary financing of the fiscal deficit and an improved monetary and exchange rate policy framework.
In addition, the program includes measures to strengthen the debt market in pesos, the effectiveness of public spending, labor and gender inclusion, and the competitiveness of key sectors.
Interests
Regarding Argentina’s debt with the Paris Club, in June 2021, the Minister of Economy announced that Argentina had obtained a «time bridge» in the framework of the Paris Club negotiations to avoid default at maturity on July 31, 2021 and that debt renegotiations would continue until March 31, 2022.
According to the “time bridge” agreement, Argentina made disbursements in July 2021 and February 2022 for a total amount of 430 million dollars, on account of the total principal amount of the debt.
As for accrued and unpaid interest, it would be included in the renegotiation that was expected to be reached on March 31, 2022.
On March 22, 2022, the Argentine government reached an agreement with the Paris Club for a new extension of the understanding agreement reached in June 2021.
The agreement includes financial guarantees from the Paris Club in support of the 30-month Extended Facility program, which allows Argentina to secure the financial sources identified in the agreement with the IMF.
These financial guarantees establish that, during the term of the program, Argentina will make partial payments to the members of the Paris Club in proportion to those made to other bilateral creditors, in accordance with the terms established in the understanding reached in June 2021.
The Argentine Government and the Paris Club undertook to conclude the process of definitive modification of the agreement defined in the «Joint Declaration of 2014» before June 30, 2022.
