Major US banks including JPMorgan Chase, Bank of America and Citigroup have abandoned plans to provide a US$20 billion loan facility to Argentina, according to people familiar with the matter cited by the Wall Street Journal.
The loan had been tied to a US$20 billion currency-swap agreement between the U.S. Treasury and Argentina concluded in October, aimed at stabilising the peso ahead of mid-term elections under President Javier Milei.
Sources say bankers are now discussing a much smaller short-term “repo” loan of about US$5 billion, intended to help Argentina meet a roughly US$4 billion payment due in January. The larger deal “is no longer under serious consideration,” one source said.
The shift reflects escalating concerns among lenders over Argentina’s collateral, economic weakness and currency-reserve position, despite the Treasury’s backing. Analysts say banks were unwilling to commit large sums without clearer guarantees and preferred shorter-term, lower-risk structures.
For global financial markets this development may signal reduced appetite for large-scale exposure to sovereign credit in volatile environments unless guarantees are robust and risk structures defined. The aborted facility underscores that even during periods of generous policy support, private capital remains cautious and selective when it comes to high-risk lending.
