Argentina's Guzman says debt offer "maximum" effort, hints at deadline delay

FILE PHOTO: Argentina's economy minister, Martin Guzman, speaks at Congress on the country's economic situation and debt plan ahead of the meetings with the International Monetary Fund officials who are traveling to the country, in Buenos Aires, Argentina February 12, 2020. REUTERS/Agustin Marcarian

BUENOS AIRES (Reuters) - Argentina economy minister Martin Guzman emphasized on Thursday that the country’s proposal to creditors to restructure around $65 billion in foreign debt was the maximum effort it could make, and hinted the deadline for a deal could be extended.

The South American nation is racing to clinch a deal to avoid a messy and protracted legal standoff with creditors after it slipped into default for the ninth time in May. The deadline for a deal set by the government is currently Aug. 4.

Negotiations, however, are at something on impasse after creditors grouped behind a counter proposal and rejected the “final” government offer made in early July.

Asked about extending the deadline, Guzman said that the government was “assessing all the options” and would make a decision soon, although he added that it had previously been the plan to set a later deadline.

“We initially had the intention of having a longer deadline on the offer we made. There was a technical issue that prevented that from happening,” he said during a virtual conference hosted by Washington-based think tank the Atlantic Council.

Reuters reported on Wednesday, citing a source close to the talks, that Argentina’s government was considering pushing back the deadline until mid-to-late August.

Guzman said that regardless of what happens with a debt deal with private creditors, the government would initiate talks with the International Monetary Fund for a new program to replace a $57 billion line of credit agreed in 2018.

Guzman said he wanted to reach a quick deal with creditors, but that it had to be sustainable. Creditors are demanding a higher payout and changes to legal clauses in the offer.

“We made a massive effort which basically shows our full commitment of achieving a consensual deal,” said Guzman. “This is clearly the maximum effort that Argentina can make and we very much hope creditors come on board and decide to put an end to this situation.”

Reporting by Adam Jourdan, writing by Cassandra Garrison; editing by Richard Pullin