Argentine government would renegotiate debt under local law

The turn to Congress was disseminated in a press release of the project, which is one of the parts of a plan for the postponement of payments of all the Argentine debt that President Mauricio Macri's Government had already announced in August.

"The bill presented in Congress seeks to give the dialogue an institutional framework that clears doubts about the ability and willingness to pay the Argentine debt in the medium and long term," the statement said.

A text of the initiative accessed by Reuters said that, if approved by Congress, the Government would request the consent of the creditors to modify the terms of the titles under local legislation, through qualified majorities.

Bonds under local law lack these "collective action clauses", unlike the titles issued under international legislation, which do.

When the proposed modification affects the terms and conditions of the titles of a single series of bonds, the consent of the holders of more than 75% of the amount of capital pending amortization of the outstanding securities of that series would be required, according to the text.

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In case of the modification of the titles of two or more grouped series, the consent of the holders of more than 66.66% of the amount of outstanding capital of the outstanding titles of all the grouped series would be required, it added.

The plan to defer debt payments covers a total of about US$ 100,000 million, including the International Monetary Fund, international private creditors, and short-term securities, in addition to bonds under local legislation.

With this initiative, the Government of Macri seeks to vent its immediate maturities to strengthen the central bank's reserves and better face an increase in financial distrust before the October elections.