June 10, 2020 / 2:31 PM / a month ago

Argentina's Fernandez eyes debt talks extension, striking deal

FILE PHOTO: Argentina's President Alberto Fernandez attends a news conference with German Chancellor Angela Merkel at the Chancellery in Berlin, Germany, February 3, 2020. REUTERS/Annegret Hilse

BUENOS AIRES (Reuters) - Argentine President Alberto Fernandez said on Wednesday that a deadline for debt restructuring talks set to expire on Friday will likely be extended by at least 10 days and possibly more as the country looks to strike a deal with creditors.

In an interview with station Radio 10, the center-left Peronist added that the recession-hit country needed to eventually reach a deal with holders of around $65 billion of its foreign debt, though that may take more time.

“It’s clear Argentina must find an agreement with creditors. It’s clear creditors did not accept our offer and Argentina is going to improve its offer,” Fernandez said, adding he would meet Economy Minister Martin Guzman to discuss details.

Asked if the Friday deadline could be extended again he said it would be and pointed out that a previous restructuring negotiation in 2005 had taken the best part of a year.

“Yes (it could be extended), 10 days or more. I don’t know. We are in a negotiation,” he said.

Argentina and its foreign bondholders have been edging closer to an deal to restructure the sovereign debt, which has become unsustainable after two straight years of recession, rising borrowing costs and a tumbling peso currency.

The gap between what Argentina is willing to pay and what bondholders are demanding has narrowed over recent months, helping propel the country’s bonds, which tumbled into distressed territory last year amid fears over the economy.

Reaching a deal is critical to avoid a messy legal standoff that could lock Argentina out of international markets for years after it defaulted for a ninth time in May when it missed a deadline for interest payments on three bonds.

Argentina is also in talks with the International Monetary Fund, a major creditor to the grains producer, to revamp a $57 billion credit facility struck in 2018 under the previous government of Mauricio Macri.

Reporting by Walter Bianchi and Maximilian Heath; Writing by Adam Jourdan; Editing by Alistair Bell

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