BUENOS AIRES, June 16 (Reuters) – The World Bank Group on Tuesday approved a $2 billion commercial loan package for Argentina, which will help the country reduce its financing costs and strengthen public debt management, the institution said in a statement.
Argentine newspaper Ambito had reported earlier on Tuesday, citing sources, that the World Bank was readying the loan package. It added that the Inter-American Development Bank was also considering a $550 million disbursement to the nation on Wednesday, with another $500 million on the table from the Development Bank of Latin America and the Caribbean (CAF) in late July.
DEAL DETAILS
• The World Bank’s package combines a policy-based guarantee from the International Bank for Reconstruction and Development with a guarantee from the Multilateral Investment Guarantee Agency, the bank said in a statement.
• The commercial loan has a six-year term, with a three-year grace period.
• The loan package is due to support reforms to mobilize private capital for infrastructure, strengthen market competition and improve the business climate for companies.
• The guarantees will cover 95% of debt service payments on the commercial loan, allowing Argentina to reduce financing costs and strengthen public debt management.
• “We are committed to supporting Argentina’s macroeconomic stabilization and its growth-oriented reform agenda,” Susana Cordeiro Guerra, the World Bank’s vice president for Latin America and the Caribbean, said in a statement.
• Ambito reported that Argentina has some $4.4 billion in repayments due by July 9.
• The World Bank said in April that it was working to provide the South American country with a $2 billion plan to refinance its debt.
• The CAF on Tuesday also announced that it will provide a $400 million loan to Argentina’s Pan American Energy to finance the company’s natural gas operations and expand production.
• On June 11, the credit rating agency S&P raised Argentina’s long-term foreign-currency sovereign debt rating from CCC+ to B- and maintained its outlook as stable.
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(Reporting by Jorge Otaola and Eliana Raszewski; Writing by Kylie Madry, Editing by Iñigo Alexander and Daina Beth Solomon)
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