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Argentina is ready to pay $912mn to the IMF next week that is expected to help renegotiate its $44bn deal with the multilateral lender as part of its Extended Fund Facility (EFF). The Economy Minister Luis Caputo said that the country will pay the above amount owed, in his first comments since unveiling the new administration’s economic plans. The plans include a large currency devaluation and a series of spending cuts designed to remove its primary fiscal deficit.
Separately, Goldman Sachs sounded optimistic on the sovereign under the new administration. Goldman added Argentina’s sovereign bonds to its basket of preferred EM distressed credits, joining peers like Citigroup, Barclays and BofA that have recommended buying Argentina bonds under the new president’s tenure. Goldman’s model points to a recovery value of about 45 cents on the dollar assuming that the peso weakens to about 2,250 from 800 currently.
Argentina’s dollar bonds are trading at ~35 cents on the dollar.