(Adds details, bond, stock exchange moves)
By Adam Jourdan and Eliana Raszewski
BUENOS AIRES, March 10 (Reuters) - Argentina will revamp as much as $68.8 billion in foreign law bonds as it restructures its debt, the government said in a decree on Tuesday, paving the way for tense negotiations as the country looks to strike a deal with creditors this month.
The decree, which follows a debt bill passed by the Senate in February, comes as Argentina battles to reach a restructuring agreement with bondholders by the end of March to avoid a damaging sovereign default.
Argentina, Latin America’s No. 3 economy and a serial defaulter, is facing a major debt crisis amid stalled economic growth and a plunge in the peso currency which has driven up the country’s borrowing costs in dollars.
The country’s Peronist President Alberto Fernandez, who came to power late last year, has said Argentina cannot pay back what it owes without being given more time to revive growth. It now faces a tough challenge to get creditors on board.
“We anticipate difficult negotiations ahead,” financial services firm Citi said a note to clients on Tuesday.
Argentina plunged into economic crisis in 2018 and was forced to turn to the International Monetary Fund for a $57 billion credit facility. The crisis worsened last year with recession, stubborn inflation and a tumbling peso.
The IMF has backed the government view that debt levels are unsustainable and called on private creditors to make a “meaningful contribution” to help resolve the crisis, indicating potential large haircuts on holdings.
Argentine officials met with bondholders including Pimco, Gramercy Funds Management and BlackRock Inc earlier this month, while negotiations with the IMF are ongoing, with both sides heralding “constructive” talks.
Argentina over-the-counter bonds and the local Merval stock exchange rebounded strongly on Tuesday after sharp losses on Monday that were sparked by global fears over a coronavirus outbreak and an oil price war. (Reporting by Adam Jourdan and Eliana Raszewski; writing by Cassandra Garrison; Editing by Bernadette Baum and Nick Macfie)