Argentina and its largest creditors struck a deal to restructure $65 billion (Dh238.7bn) of debt, setting the stage for the South American nation to emerge from its third default since the turn of the century. The government said its deal with key creditors would grant the country significant debt relief after changes in the payment dates and legal clauses for the new bonds. Under terms of the accord, Argentina moves coupon payments to January and July from March and September, and shortens the maturity of a bond offered to compensate for unpaid interest, according to a statement from the economy ministry on its website on Tuesday. The agreement is the result of months of talks between the government and big bondholders including BlackRock, Ashmore, and Fidelity Investments, and is the first step toward stabilising a struggling economy. Inflation hovers near 45 per cent, the peso has lost more than half its value in just a few years and gross domestic product is set to shrink for the third consecutive year. The country and its creditors had volleyed offers for weeks, negotiating over the length of the payment delay, changes to the legal language in the bonds’ contracts, how interest on the securities issued in the restructuring would be paid and the amount of principal haircut - if any - to stick investors with. “It’s very beneficial to the extent it was reached quickly, far quicker than any previous time, and without much acrimony, despite a lot of lobbying and second guessing by informal advisers and pundits,” said Richard Segal, a London-based senior analyst at Manulife Investment Management. “The revised offer was close to what the largest creditors could accept, who in turn understood that the country’s repayment capacity was limited.” The deal announced by the government on Tuesday with the Ad Hoc Group of Argentine Bondholders, the Exchange Bondholder Group, the Argentina Creditor Committee and other investors followed earlier reports that the two sides had made progress toward a deal over the weekend, driving the nation's bonds to the highest level in more than five months on Monday. Argentina's <em>€</em>750 million (Dh3.24bn) bond due 2047 rose 0.4 cents to 39.5 cents on the dollar after the announcement in European trading. While the post-pandemic future is uncertain for most countries, the outlook for Argentina, ranked 139th out of 141 countries for economic stability by the World Economic Forum, is among the most precarious, with President Alberto Fernandez’s eight-month old government forced to restrict access to dollars, increase taxes and ban layoffs. The breakthrough came during a call on Sunday between Argentine economy minister Martin Guzman and BlackRock managing director Jennifer O’Neil, two sources said, with participation of Bank of America, which is advising the government. An Ad Hoc Bondholder Group representative didn’t immediately reply to a request for comment.