Argentina’s $20bn bank loan stalls as lenders demand US guarantees… argy bargy continues

You’re probably going to read this an think “ass covering”. I sure did. Fair enough I guess.

A consortium of major banks, including JPMorgan, Bank of America, Goldman Sachs, and Citigroup, is struggling to put together a $20 billion loan for Argentina due to concerns about the country’s “virtually-bankrupt” status, according to a Wall Street Journal (gated) report.

Citing people familiar with the matter, the report states the loan is part of a larger $40 billion financial package championed by the Trump administration to support Argentina’s libertarian President, Javier Milei. This package also includes a $20 billion currency swap from the U.S. Treasury Department.

The banks are reportedly seeking a guarantee or pledge to ensure they will get their money back and are waiting for guidance from the U.S. Treasury on what collateral Argentina could provide, or if Washington itself would backstop the loan. The sources noted that while banks typically arrange such facilities, the Treasury is controlling the broader package, leaving the banks feeling they cannot act without U.S. government backing. The report concluded that the loan facility has not been finalised and might not come together if the banks’ concerns over collateral are not resolved.

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The market impact of this uncertainty is highly negative for Argentine assets, as the $20 billion bank loan is a critical component of the government’s $40 billion stabilisation plan.

This public hesitation from Wall Street’s biggest banks injects severe scepticism into the market, confirming fears that private capital remains unwilling to take on Argentine risk without an explicit U.S. government guarantee. This news will likely increase pressure on Argentina’s sovereign bond prices, widen the country’s risk spreads, and weaken the peso as investors fear the financial backstop for President Milei’s economic reforms is failing to materialise.

This article was written by Eamonn Sheridan at investinglive.com.