$20bn loan to Argentina stalls over collateral demands
A pivotal deal is being discussed in Washington for Argentina and the fragile state of its national currency. A group of leading US banks (JPMorgan Chase, Bank of America and Citigroup) is examining a credit line for Buenos Aires.
A sizeable $20bn facility is on the table, yet lenders want clarity on what will secure repayment. The discussion centres on hard collateral and potential government guarantees: without clear risk protection, no final agreement is expected to emerge.
The talks form part of a broader support package, widely referenced by market sources in recent days. The overall envelope could reach $40bn, with roughly half of that, about $20bn, potentially coming via a US–Argentina foreign‑exchange arrangement.
Buenos Aires is counting on the funds to ease domestic strains, bolster reserves and stabilise the peso. Participants await detailed guidance from the relevant US authorities: which assets are acceptable as collateral, under what terms guarantees might apply, and how repayment priority would be structured.
The IMF, to which Argentina, as of 20 October 2025, owes about $57.1 billion, is closely watching the process amid concern over the extent of US leverage on President Milei’s government. Fund officials worry the White House could push for prioritising repayment of US‑linked credits, even ahead of overdue obligations to the IMF.
On Sunday, October 26, legislative elections will be held in Argentina. If there is clarity on the structure and collateral of the deal before voting begins, markets would at least gain temporary reference points and fewer reasons for sharp moves. Prolonged uncertainty, by contrast, risks amplifying volatility and complicating negotiations for the current authorities as well as for any incoming administration.
The government is grappling with high inflation, a weak peso and limited access to external finance. In these conditions, officials are seeking near‑term liquidity bridges – tools that could help the country navigate the next few weeks without fresh dislocations. International creditors are watching closely to see whether any new support is aligned with existing programmes and whether it avoids conflicts over payment seniority.
The days ahead are critical. Lawyers and risk officers need to consolidate collateral and guarantee requirements into a single document and set the technical timetable for any initial drawdown. That will determine when and in what size funds could reach the central bank (which, by the way, Javier Milei once promised to abolish), and how quickly the move might feed through to the foreign‑exchange market.
