NEW YORK, April 20, 2020 /PRNewswire/ -- In connection with the press release published on April 17, 2020 by the government of Argentina relating to Argentina's proposed offer for the restructuring of its external sovereign debt, an ad hoc group of major institutional holders of Argentine external sovereign debt including but not limited to funds managed or advised by AllianceBernstein, Amundi Asset Management, Ashmore Investment Management Limited and Ashmore Investment Advisors Limited, BlackRock Financial Management, Inc. and its affiliates, BlueBay Asset Management LLP, Fidelity Management & Research Co., T. Rowe Price Associates, Western Asset Management Company LLC, and Wellington Management Company LLP (the "Group"), and supported by its international legal advisors White & Case LLP, has reviewed the proposals as set forth in such press release. The Group currently holds, collectively, more than 25% of Argentina's post-2016 bonds and more than 15% of Argentina's "Exchange" bonds. The Group represents the interests of the millions of individuals and thousands of financial advisors and institutions who have entrusted their money to Group members to invest on their behalf.
The Group has sought to engage constructively with the Argentine authorities to design a framework for the debt restructuring that the Group and the broader international investor community can support. The Group understands that the Argentine economy has faced various economic and political shocks since 2017, including due to the Covid-19 pandemic, and that full economic recovery will be a gradual process. In this context, the Group has expressed support for a restructuring plan that defers near-term maturities and provides more than $40 billion of cash flow relief to Argentina in the coming years.
The Group's proposed restructuring plan would provide the administration with financial space with a view to meeting the economic and social demands of the Argentine people in the near-term and also create a foundation for longer term success. The Group also believes the administration needs time to effectuate its fiscal initiatives to restore stability to the Argentine economy. By providing the administration with an extended period of significant cash flow relief, the Group seeks to provide a window for the steadfast implementation of policies which support economic growth, financial sector inclusion and overall sustainable development.
Regrettably, despite the efforts of the Group and other stakeholders, the proposals contained in the recently published press release are not ones which the Group can or will support. The Group believes that all stakeholders in Argentina will need to contribute to a solution that puts Argentina on a path toward sustainable growth and financial stability. However, the proposals included in the press release fall short of that mark, and seek to place a disproportionate share of Argentina's longer-term adjustment efforts on the shoulders of international bondholders.
The Group stands ready to continue the process of negotiation in an effort to achieve a mutually agreed path forward. In conjunction with the Argentine authorities, the IMF and the country's other private- and official-sector creditors, the Group is confident that a constructive and pragmatic solution to the country's current debt challenges can be achieved that also adheres to international best practices for sovereign debt restructuring. Together, with needed support from Argentina's international partners and the IMF, this is the path that will restore Argentina's creditworthiness and efficient access to the international capital markets, preserving its place within the global financial community, and ensuring its ability to invest in the Argentine people and the country's economic development in the years ahead.
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SOURCE White & Case LLP