Executive Branch Enacts Public Debt Sustainability Law: Updates Fiscal Agreement
12 febrero 2020

On February 12, the Executive Branch enacted Decree 137/2020, the Law to Restore the Sustainability of Public Debt Issued Under Foreign Law, authorizing the Government to renegotiate the debt with international creditors. The measure was passed on February 6.

The text consists of eight articles conferring authority on the Minister of Economy as the enforcement agency to carry out swaps or restructure the maturity of obligations issued under foreign law in foreign currency.

The following day, on February 13, Economy Minister Martín Guzmán asked the bondholders for cooperation but avoided giving any details about the process to renegotiate the public debt, at his briefing to the Chamber of Deputies. He said that restoring debt sustainability should be state policy and added that “there is a lot of money at stake”. 

President Alberto Fernández also put into effect Decree 141/2020, postponing service payments on the “Argentine Dual Currency Bonds maturing in February 2020”. These payments will be postponed until September 30, 2020, and the accrual of interest will also be interrupted.

The Government also issued Decree 136/2020 on the new Fiscal Agreement which reverses the 2017 agreement between the national government under former president Mauricio Macri and the provinces to reduce the tax burden. See the updated agreement here.