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Argentina clinches deal with creditors to restructure $65 billion debt, bonds rise

A general view of a street linking to 9 de Julio Avenue is seen with cars as Argentina extends the curfew till 24th of May, imposed since 20th of March, in an effort to stem the spread of the coronavirus (COVID-19) pandemic in Buenos Aires, Argentina on May 21, 2020.
Muhammed Emin Canik | Anadolu Agency via Getty Images

Argentina's government announced early Tuesday morning it had reached a deal with creditors to restructure $65 billion in sovereign debt, drawing a close to months of negotiations rife with gridlock and disagreement.

The country's existing euro bonds rose by as much as 3 cents on the news, building on gains in the previous session on anticipation of an agreement.

Three creditor groups — the Ad Hoc Group of Argentine Bondholders, the Exchange Bondholder Group, and the Argentina Creditor Committee — will now help Argentina to restructure its debt and offer it significant debt relief.

Talks as recently as June had hit an impasse when Buenos Aires said it could not "responsibly commit" to the terms offered by creditors.

Latin America's third-largest economy, already in default, has for months left billions of dollars worth of bonds in default as its economy is hammered by the coronavirus pandemic.

Rising poverty and unemployment, as well as soaring interest rates amid an already two-year-long recession, had the country of roughly 45 million in dire financial straits even before the virus hit.

On May 22, Argentina saw its ninth sovereign debt default after missing overdue interest payments.