BUENOS AIRES (Reuters) -Argentina’s Buenos Aires province, which has been negotiating a $7 billion restructuring of its foreign debt for over a year, said that it had reached a breakthrough agreement with key creditors on an amended offer, taking it closer to a deal.

The provincial government said the agreement here with its main creditor GoldenTree Asset Management and other bondholders would allow it to formally amend its current offer and “move forward towards the completion of the debt restructuring process.”

The winding talks, while the national government and other provinces have struck deals, have sparked tensions with creditors, who earlier this year filed a lawsuit against what they called a “continued default” by the provincial government.

The province said in a statement that the amended terms of debt offer would imply a total reduction in debt service payments of some $4.45 billion between 2020 and 2024, while average coupons would be reduced to 5.6%.

“Reaching this understanding, after intense negotiations, was possible thanks to the shared efforts allowing us to move towards a definitive solution,” provincial finance minister Pablo Lopez said in the statement.

Reuters could not immediately reach the province’s main creditor committee for comment.

Lopez added that the agreement had been helped, in part, by improving economic conditions and declining cases of COVID-19 amid a national and regional vaccination push.

“This is a key step to recover a sustainable debt profile, according to our ability to pay and the enormous difficulties that we must face,” he said.

Earlier in July the province, the South American country’s wealthiest, had extended the deadline for the negotiations to July 23 to allow a “last round” of talks.

The agreement with top creditors is key, though the local government will now need to formally amend its offer to allow all bondholders to decide on accepting or rejecting it. It said it would extend the invitation deadline for this to Aug. 13.

Reporting by Adam Jourdan; Additional reporting by Marc JonesEditing by Tomasz Janowski, Kirsten Donovan

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