BUENOS AIRES (Reuters) – Argentine bonds were pushed higher by external market factors on Friday, despite a credit ratings downgrade by Fitch while Wall Street panned the government’s bond restructuring proposal for its lack of detail and tight 20-day negotiating window.

The country’s over-the-counter bonds rose an average 5.7% while country risk 11EMJ fell 496 basis points to 3,490 over safe-haven U.S. Treasuries. The rally reflected improving global sentiment – punctuated by a massive pop in U.S. equities – as bondholders analyzed the government’s long-awaited sovereign bond restructuring plan outlined on Thursday.

Fitch Ratings downgraded Argentina’s long-term foreign currency bonds to C from CC, warning of an “imminent” default if bondholders reject the government’s restructuring terms.

Economy Minister Martin Guzman laid out the framework of the bond revamp on Thursday. He gave creditors three weeks to mull his proposal for $41.5 billion in debt relief, mostly in the form of reduced interest payments, as the country grapples with a recession compounded by the coronavirus outbreak.

“Minister Guzman himself says that he hasn’t reached an agreement with bondholders and yet imposes an aggressive 20-day deadline,” said Siobhan Morden, head of Latin America fixed income strategy at Amherst Pierpont Securities in New York.

“There is no urgency to accept the first offer when there are no prospects for any payments anytime soon,” she said in a note to clients.

Not all market reaction was negative. Gabriel Zelpo, director of Buenos Aires economic consultancy Seido, called the proposal “better than what markets were pricing in.”

“Bondholders were afraid of something radical, like no coupon payments or high capital haircuts,” he said.

The proposal includes a sizable cut to interest payments, amounting to a saving of around $37.9 billion, or 62% of the current total. The average proposed new rate would be 2.33%.

There would be a smaller capital cut of around $3.6 billion, or 5.4% of the total debt stock, Guzman said.

Argentine gross domestic product (GDP), already anemic before the pandemic hit, has plummeted since the country went on lockdown to slow the spread of the virus on March 20.

“Their economic situation has deteriorated and it is not conducive to making generous offers, but I think their capacity for debt servicing is higher than what this offer reflects,” said one Argentine bondholder, who asked not to be named.

Fitch said in a statement that it “expects payment default on upcoming bond payments could be imminent should an agreement with bondholders not be reached in the coming weeks.”

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