August 7, 2020
1. Government and main bondholders reached an agreement for the private debt of foreign legislation
Following months of negotiations, Economy Minister Martín Guzmán announced that the government and Argentina’s primary creditors reached an agreement to restructure the country’s foreign debt. The agreement allows the country to substantially reduce its USD 66.3 billion debt in bonds – Argentina will pay out USD 54.80 for each USD 100, a 45% reduction in its debt burden. Moreover, creditors will receive their first new bond payments earlier, January 9th and July 9th instead of March 4th and September 4th. The date by which bondholders can join in on the agreement was extended to August 24th. The news generated a positive impact on capital markets, with Argentine stocks rising. On the other hand, the Congress approved the bill that restructures the country’s public debt emitted in U.S. dollars under local legislation.
2. Congress debates the moratorium and the judicial reform
The Chamber of Deputies approved an extension of the tax moratorium that would allow “single tax”-payers, freelancers and businesses to access an accumulated tax debt and pension payment plan through July 31st. The initiative was turned over to the Senate, which for its part began to debate the judicial reform that the Executive Branch sent. In this sense, the Commissions of Constitutional Affairs and Justice and Criminal Matters had the participation of the Minister of Justice, Marcela Losardo, who defended the project.
3. Industrial activity drops 6.6% interannually, increases 13.8% over last month
The Argentine statistical agency (INDEC) reported that industrial activity in June dropped 6.6% compared to the same month last year. The same index, however, registered a positive 13.8% increase over May. The sectors that experienced an increase over June 2019 include foods and beverages (+4.8%), tobacco products (+87.5%), and substances and chemical products (+7.6%). The sectors that reported the biggest decreases included clothing, leather and footwear (-38.9%), basic metals (-36.8%) and automobiles, trucks and auto parts (-31.8%).
4. Government repeals decree expropriating Vicentin
President Alberto Fernández repealed Emergency Decree 522/20 that established the expropriation of agricultural exporter Vicentin. The measure was made official through Decree 636/20 which was made after the second conciliation hearing between the company and representatives from the Government of Santa Fe failed to reach an agreement. President Fernández explained that he will not take on risks that could nationalize private debt as a consequence, and that current administrators should take it on instead. He also assured that that he gave instructions so that corresponding government entities begin actions that will allow for the recuperation of reclaimed credits during the preventative decree, of which the Argentine central bank possesses USD $1.35 billion.
5. President announced a public works plan for five provinces
President Alberto Fernández announced the start of works and the reactivation of tasks that were paralyzed in Buenos Aires, Entre Ríos, Corrientes, San Juan and Santa Cruz. This infrastructure plan includes an investment of AR$ 22,645 million in the five provinces. The announcement was made in the company of the Minister of Public Works, Gabriel Katopodis, from Casa Rosada, through a videoconference in which also participated the governors of the respective provinces.