Argentina sketches out debt revamp with $38 bln coupon cut, 3-year payment halt

It was already grappling with a biting recession.

Then came the lockdown.

But Argentina has put forward a route out of its financial woes.

The county's economy minister laid out the debt restructuring proposal to international creditors on Thursday (April 16).

It involves a three-year grace period, large cuts in interest payments and a smaller reduction in capital owed.

In total the proposal would involve around 41.5 billion dollars of relief.

The offer is a key step in a long-running saga as Argentina has looked to revamp its heavy debt load, after political upheaval and a market crash last year drove its bonds into distressed territory.

Economy minister Martin Guzman:

(SOUNDBITE) (Spanish) ARGENTINE ECONOMY MINISTER MARTIN GUZMAN, SAYING: (SOUNDBITE CONTINUES OVER DIFFERENT SHOTS OF MINISTERS)

''There is consensus in the fact that today we cannot pay the debt. We have the will to do it, but we do not have the capacity to do so. Then there is a limit to where you can go and the proposal then involves a greater reduction of interest than capital. "

Under the proposal, Argentina would pay nothing until 2023, then gradually start ramping up interest payments.

The proposal, which was initially expected to be made by mid-March, has been delayed by the global pandemic which has battered the country's already fragile economy.

President Alberto Fernandez says it's time for action:

(SOUNDBITE) (Spanish) ARGENTINE PRESIDENT, ALBERTO FERNANDEZ, SAYING:

''We know we have a problem to solve, we know the world economy has shifted, Just as we are all united in facing the pandemic, we are united in solving the problem of debt and even in these adverse circumstances we continue to propose a solution."

The government said 21 bonds worth around $66 billion would be eligible for the offer.

Analysts said more detail was needed before they could give a verdict.