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| - Three groups of creditors announced on Monday they had rejected Argentina's proposal to restructure $66 billion of debt and have made a counter offer to President Alberto Fernandez's government. "Argentina's offer is short of what the creditor groups can accept," said the creditors in a statement, adding that they would not meet the government's August 4 deadline to find an agreement. However, the creditors expressed confidence that an "agreed solution" could be found that insures "the future economic sustainability for the Argentine people." Argentina's latest offer, issued under foreign law, was worth 53.5 cents on the dollar, a significant improvement on its original starting position of 39 cents. Having originally proposed a three-year grace period, the latest offer reduced that to one, with repayments beginning in September 2021. The Exchange Bondholders, Ad Hoc and Argentina Creditor Committee groups that issued the statement claim to represent a third of bondholders under foreign law involved in the restructure talks. That gives the groups veto power over any restructure deal, experts say. Argentina Creditor had seemed more disposed to accepting the government's offer but in joining the other two groups "they are practically in a position to block the whole deal," economist Sebastian Maril told AFP. "And if they work together, as one, it's going to be very difficult for Argentina to reach an agreement." The groups did not divulge any details about their counter offer but sources close to the negotiation said it represents 56.6 cents on the dollar with the new bonds beginning to accrue interest from September this year. The groups said their offer would offer Argentina relief to its urgent needs, access to capital markets and the legal framework necessary to attract investors. Fernandez and Economy Minister Martin Guzman have already said that the current proposal is "the last effort" that Argentina can make. "We made a (first) offer (in April). We saw that we were a long way away from their expectations, we revised it and made the maximum effort and this is the last offer, I hope they understand that," Fernandez said last week. The bonds represent roughly a fifth of the country's $324 billion debt, which amounts to around 90 percent of its GDP. In recession since 2018, the Argentine economy has been further punished by the coronavirus pandemic. The International Monetary Fund estimates it will contract by 9.9 percent this year. With the backing of the IMF, Fernandez has insisted that any deal with creditors be sustainable so that the country can meet its obligations over the long term. But Argentina has been in default -- for the ninth time in its history -- since May 22 when the country missed a deadline to pay $500 million in interest on the debt that is subject to the current negotiation. nn/ml/mr/bc/bgs
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