BUENOS AIRES (Reuters) – Argentina’s government reaffirmed on Saturday that it would not budge from its latest proposal to restructure around the $65 billion in debt, but signaled it would be willing to negotiate on the fine print around the deal.

The South American country is facing a standoff with bondholders after creditor groups joined forces to reject the government’s proposal earlier in July and put forward one of their own.

The government has repeatedly said it cannot offer more, though sources told Reuters this week it would be willing to negotiate key contractual terms.

“Argentina wishes to and will contribute to the development of contractual instruments that enhance the success of sovereign restructuring initiatives when they enjoy meaningful creditor support,” the Economy Ministry said in a statement. 

The ministry said the bondholder group’s counterproposal called for “yet more generous financial terms for the creditors compared to Argentina’s current offer,” while requesting that Argentina cover fees and expenses of the creditors’ advisors.

“Those aspects of the counterproposal that seek to impose additional burdens on an economy that is choking in the midst of the COVID-19 crisis … cannot be accommodated,” the ministry said in the statement.

Analysts say a gap of about 3 cents on the dollar between the sides at the negotiating table should be bridged in last-ditch talks ahead of a current Aug. 4 deadline for a deal to avoid a messy legal standoff.

Creditors’ legal demands include that amendments be made to the 2016 indenture for new debt issued in exchange for ‘Macri’ bonds, to prevent the government from using ‘Pac-Man’ style measures to make future changes to any agreement.

Argentina has been in default since May, the country’s ninth, and is headed for 10-12% economic contraction this year due to the impact of COVID-19, deepening a recession that began in 2018.

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