Journal Issue

IMF completes second review of Argentina program

International Monetary Fund. External Relations Dept.
Published Date:
March 2004
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IMF approves second review of loan to Argentina

The IMF Executive Board on March 22 completed the second review of Argentina’s performance under a three-year $13.3 billion loan, paving the way for a disbursement of about $3.1 billion. In completing the review, the Executive Board approved the modification of a structural performance criterion and a waiver for the nonobservance of a performance criterion. Below are excerpts of a statement made by Anne Krueger, Acting Managing Director and Chair, after the Executive Board’s discussion.

“Argentina’s economy continues to recover rapidly, facilitating steady improvements in employment and poverty indicators. Progress is also being made in implementing reforms in key structural areas such as the banking system and the utilities sector. The authorities have indicated their willingness to negotiate with their private creditors with the aim of reaching an early comprehensive and sustainable sovereign debt restructuring.

The authorities’ commitment to reach a collaborative agreement with their private creditors on a sovereign debt restructuring is welcome. The main elements of the authorities’ framework include: (1) appointing investment banks throughout the restructuring process to assist in preparations and help market the debt exchange offer; (2) engaging in constructive negotiations with all representative creditor groups; and (3) formulating an offer that will result in a sustainable debt for Argentina and attain broad support from creditors. The authorities have already implemented elements of this agreed debt restructuring strategy: three international and three domestic investment banks were appointed and the terms of their engagement were disclosed; and 25 representative creditor groups were invited to hold separate discussions in Buenos Aires during March 24-April 16, 2004. The groups invited include the Global Committee for Argentine Bondholders, domestic institutional and retail holders such as the Asociacion de Ahorristas de la Republica Argentina, and European retail bondholder organizations such as the Comitato Investitori di Titoli Argentini. The authorities will endeavor to avoid a piecemeal approach to the debt restructuring and intend to finalize, with the assistance of their investment banks, an appropriate minimum participation threshold necessary for a broadly-supported restructuring.

Consistent implementation of this debt restructuring framework will be essential for the continued support of the international community. In particular, the authorities’ intention to discuss with creditors all aspects of the debt exchange offer, including how best to take into account proposals received from creditors, is crucial. The authorities are encouraged to work diligently to design a debt exchange offer that attains the highest possible creditor participation, reduces the risk of protracted litigation, and restores debt sustainability,” Krueger said.

The full text of Press Release No. 04/57 is available on the IMF’s website (

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