BUENOS AIRES, Aug 3 – Argentine sovereign bonds rose an average 0.5% on Monday afternoon, reversing course after falling earlier in the day, while stocks jumped on hopes of a last-minute breakthrough in debt restructuring talks ahead of a deadline on Tuesday.
The South American country and its creditors have been at an impasse over proposals to revamp around $65 billion in foreign debt ahead of an Aug. 4 deadline after creditors rejected the country’s “final” offer and rallied behind a counterproposal.
The government is weighing whether to extend negotiations until later in August to give more time for the two sides to reach a deal.
With little from the government or creditors, rumors swirled. Economy Minister Martin Guzman was also expected to meet with lawmakers to discuss the theme of debt.
“Rumors are full and the markets are flying. It will be several hours until they say exactly how everything is coming,” one official source told Reuters.
Argentine President Alberto Fernandez and Guzman have been adamant that an amended offer made in early July, following months of talks, is the maximum effort the recession-hit country can make.
“We can’t offer creditors more,” Guzman told local outlet Pagina12 on Sunday.
“If there’s no deal we will advance with the IMF on a new program and come back to talk with the private sector in six or eight months, but with a deeper restructuring proposal.”
Citi Research said in a note that given the small gap between the two sides – seen at around 3 cents on the dollar – talks should continue, though there was growing “uncertainty” given that both sides were digging in their heels.
Argentina, a major grains producer that has been in default since May, struck a $57 billion deal with the International Monetary Fund in 2018.
Guzman has said Argentina is assessing all options ahead of the Tuesday deadline, though the government has hinted at a delay.
Argentina’s largest province, Buenos Aires, did extend the deadline on its own $7 billion debt talks until Aug. 14 on Monday after a previous date of July 31 passed without a deal. (Reporting by Adam Jourdan; Additional reporting by Rodrigo Campos and Jorge Iorio; Editing by Steve Orlofsky and David Gregorio)