The Argentine government has extended a deadline to restructure $65bn (£53bn) of debt to 22 May in an effort to avert further financial turmoil.Argentina had asked private bondholders to accept significantly lower interest payments and to defer those payments until 2023.
Most bondholders rejected the offer.
The government says it cannot afford to make the payments amid the coronavirus pandemic but non-payment could make it almost impossible to get future loans.
Governments often choose to finance spending by issuing bonds - this means they are loaned money by investors who expect to be paid a certain amount of interest for a number of years before they are repaid the amount that was borrowed.
The interest rate governments pay depends on how high investors think the risk is that they might fail to make a payment (known as a default).
What's the context in Argentina?At the end of 2019, Argentina had racked up $323bn of debt, the equivalent of 88% of its gross domestic product, according to International Monetary Fund figures.
On 10 December, the centre-left politician Alberto Fernández was sworn in as Argentina's new president.
Why does it matter?
If the two sides fail to reach an agreement by 22 May and Argentina does not make the $500m interest payment due on that day, the country will be in default.
Being in default can have severe consequences.