World Bank issues Argentina guarantees for US$2-billion commercial loan

The World Bank on Tuesday announced it was issuing guarantees to allow Argentina access to up to US$2 billion in commercial loans, a move designed to aid the embattled economy's access to international capital markets.

Debt-strapped Argentina has private debt payments of more than US$4 billion coming due in July.

The new loan will have a six-year maturity, with a three-year grace period, the World Bank said, but it did not offer further details on its conditions or who was providing it.

President Javier Milei's drastic programme of economic reforms has won market approval and enabled the country to return to private capital markets.

The World Bank guarantees will cover 95 percent of the debt service payments under the commercial loan, "enabling Argentina to lower borrowing costs and strengthen public debt management," the multilateral lender said in a statement.

"We are committed to supporting Argentina's macroeconomic stabilization and growth reform agenda," said Susana Cordeiro Guerra, World Bank vice president for Latin America and the Caribbean.

"This innovative guarantee structure helps bridge the country's return to international capital markets, mobilising financing on more affordable terms while supporting reforms that boost private investment, productivity, and long-term resilience," she said.

Fitch and S&P have both raised Argentina's credit rating to 'B-' in recent weeks, citing the country's improved fiscal picture and progress on reforms.

Argentina's external position has also improved in recent months as energy prices have surged, reflecting its status as a net energy exporter.

Its first-quarter trade surplus hit a record US$5.5 billion.

In May, the International Monetary Fund board completed its latest review of the country's US$20-billion programme, unlocking US$1 billion in disbursements.

– TIMES/AFP

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