By Nicolás Misculin and Adam Jourdan
BUENOS AIRES (Reuters) - Argentina unveiled an amended proposal to restructure around $65 billion in debt on Thursday, with slightly earlier maturities and a shorter two-year grace period after earlier knocking back a new counter offer from two key creditor groups.
Economy Minister Martin Guzman said in a statement progress was being made in crunch talks ahead of a June 2 deadline, but there was work left to do to strike a deal to avert a messy legal standoff that could drag on for years.
He added that an offer from the Ad Hoc Bondholder Group and a second group of bondholders was a positive step but "still fell short, insufficient for the needs of the country."
"The result is that we have come closer but there is still an important way to go," Guzman said, echoing a statement made earlier to Reuters.
Argentina and its creditors are locked in a new round of talks about restructuring billions of dollars of debt, which the South American country says it is unable to pay without getting substantial relief. The major grains producer last week failed to make around $500 million of bond payments, marking its ninth sovereign default.
Creditors rejected a government offer in April, while subsequent counter-proposals from bondholders were knocked back as not giving the country enough breathing room as it grapples with a biting recession.
Both sides have struck a more conciliatory tone in recent weeks, despite the default.
In a separate statement, the government said it had presented creditors a "revised debt proposal" during talks, which would see coupon payments restart in 2022 on most bonds, earlier than a 2023 target in its original offer.
The revisions https://www.argentina.gob.ar/sites/default/files/anexo28.5.pdf would also bring maturities on most of the new bonds one year earlier than initially proposed and improve the coupon payments for some bonds.
The Ad Hoc group, which includes names like BlackRock, AllianceBernstein and Ashmore, said earlier its latest proposal offered Argentina more favorable terms, including more than $36 billion of front-loaded cash flow relief over a nine-year period.
Ad Hoc said the proposal, made jointly with the Exchange Bondholder Group, which holds $4 billion of Argentina's so-called "exchange bonds", had the support of the country's "largest creditor constituencies." The group did not provide further details of the offer.
Guzman said the government hoped to keep working with the Ad Hoc group, but added it was currently the "furthest away" from meeting the country's requirements.
"There are other creditors with whom we have traveled a path that brings us closer," he said.
(Reporting by Adam Jourdan, Nicolas Misculin and Rodrigo Campos; Editing by Tom Brown, Jane Wardell, Richard Pullin and Lincoln Feast.)