By Hugh Bronstein

BUENOS AIRES (Reuters) – Argentine markets were filled with uncertainty as the market opened on Friday, with the government’s deadline for bondholders to agree to its debt restructuring offer only hours away.

The Economy Ministry’s proposal to restructure about $65 billion in “unsustainable” sovereign bonds was set to expire at 6 p.m. (2100 GMT) in Buenos Aires with no indications of a deal with creditors or an extension of the deadline on the horizon.

“The market is pessimistic about the chances of a deal being reached today,” said Gabriel Zelpo, director of Buenos Aires economic consultancy Seido.

“There were no significant advances since the initial proposal. Lets see if the government decides to improve the proposal and extend the negotiation time,” he added.

Some major holders have balked at Argentina’s proposal to impose big cuts in coupon payments, a three-year payment hiatus and a push back of maturities into the next decade. The offer was unveiled in the middle of last month.

“There clearly needs to be some upfront cash flow relief but this doesn’t necessarily rationalize three years of no payments,” said Siobhan Morden, head of Latin America fixed income strategy at Amherst Pierpont Securities in New York in a Friday note.

The bond revamp is part of a broad restructuring with creditors, including the International Monetary Fund and Paris Club of country-to-country lenders. The government says its ability to pay creditors is extremely limited as Argentina was already in recession before going on lockdown against the coronavirus pandemic on March 20. Since then the economy has shriveled.

“Overall, it is unclear to us if an understanding will be reached,” Citi said in a note to clients.

“The final outcome remains very uncertain to us,” it said.

Argentine country risk as measured by JP Morgan’s Emerging Markets Bond Index Plus was virtually unchanged when the market opened on Friday at 3,311 basis points over safe-haven U.S. Treasury bonds.

(Reporting by Hugh Bronstein, additional reporting by Rodrigo Campos in New york; Editing by Steve Orlofsky)