Argentina asserts its re-entry into global markets through the issuance of peso-denominated bonds. Argentina’s government will issue a five-year bond denominated in pesos aimed at international investors who are permitted to purchase it in US dollars, a move the government celebrated as its return to global markets following a sovereign restructuring during the pandemic. On Monday, Finance Secretary Pablo Quirno announced on X that the auction scheduled for May 28 is expected to generate up to US$1 billion.
Analysts swiftly highlighted that the bond will contribute to the accumulation of the Central Bank’s foreign reserves, while Economy Minister Luis Caputo characterized the auction as a significant milestone. However, one of his deputies clarified that it would be issued under local Argentine law rather than New York law, as is customary for most international bonds. “Argentina returns to earn international market access to refinance capital in local currency,” Caputo posted shortly after on X as well. “It’s something that the vast majority of countries do with normality, but wasn’t possible for Argentina given its disastrous economic track record.” Quirno announced that it will mature in 2030 with a fixed interest rate, and the instrument will also feature a two-year put option, providing investors with an early exit alternative prior to the next presidential election in late 2027.
For the first time in nine years, Argentina has issued a peso-denominated bond aimed at international investors. The most recent transaction of this nature occurred under the previous pro-business administration, during which Argentina issued peso-denominated debt to international investors, including Franklin Templeton. Analysts commended the auction as an indication of Milei’s capacity to control triple-digit inflation and uphold a comparatively stable exchange rate. “Argentina’s return to the markets to issue long-term debt linked to the peso is a key sign of confidence in the government’s stabilisation programme and its ability to restore the Argentine peso’s credibility as a store of value,” said Juan Pedro Mazza, institutional sales associate with Buenos Aires-based brokerage Grupo Cohen SA.
The bond sale is a component of a wider strategy employed by Caputo and President Javier Milei aimed at enhancing Argentina’s international reserves in anticipation of a crucial deadline associated with the nation’s US$20-billion agreement with the International Monetary Fund. Argentina has pledged to increase its net international reserves by US$4.4 billion by June 13 in order to adhere to the IMF programme; however, estimates from private economists suggest that the monetary authority is still considerably below that target. The government has recently disclosed that it is in negotiations for a US$2-billion repurchase agreement, or repo, with a consortium of international banks to help bridge the gap.
The government will also provide a variety of peso instruments to domestic investors, which will include short-term notes that mature between June and November 2025, as well as medium-term bonds set to mature in 2026. The peso bond sale to global investors signifies a significant advancement in the financial strategy being developed by the Milei administration. While the government has concentrated significantly on fiscal tightening and monetary restraint, it now seems to be pursuing new external funding sources to fulfill IMF targets without depleting Central Bank reserves or issuing pesos that would exacerbate Argentina’s already elevated inflation.
Milei’s economic team has refrained from purchasing dollars in Argentina’s official currency market by providing pesos, consistent with its overarching goal of preventing monetary expansion. This strategy is integral to a broader plan aimed at reducing inflation and bolstering the peso ahead of Argentina’s midterm elections in October. The bond sale “opens door to reserve accumulation through future deals,” stated Joaquín Bagues, managing director at brokerage Grit Capital Group. “This deal represents a liquidity event for the modern era of carry trade in Argentina.”