After nearly eight years absent from foreign-currency financing markets, Argentina’s Treasury disclosed the outcome of its auction: it successfully issued US$1 billion of a new four-year bond, featuring a 6.5% coupon, in accordance with Argentine law. Over 2,500 investors submitted bids exceeding US$1.4 billion. The yield at the cut-off price was established at an annual rate of 9.26%. “The rate is equivalent to a spread of 550 basis points above U.S. Treasury bonds of comparable maturity, or roughly 100 basis points below the yield on existing bonds with similar duration,” the Economy Ministry stated. “This reflects the value assigned to the market structure — with full amortization at maturity — and investors’ demonstrated confidence in the improvement of economic fundamentals.” The yield exceeded the expectations set forth by Minister Luis Caputo. On Tuesday, he informed investors during a meeting that the Treasury team was targeting financing with a final yield that would be slightly below or equal to 9% annually.
Market participants expressed confidence in the government’s ability to successfully complete the placement, with the proceeds earmarked for covering the maturity of Bonares set to come due in January 2026. The total maturity amounts to approximately US$1.2 billion. Another US$3.6 billion remains unresolved. However, in addition to Buenos Aires experimenting with a pure dollar issuance through bonds governed by local law, the Finance team is conducting a more significant examination: assessing the feasibility of re-entering markets without the prerequisite of having built up international reserves. The yield presented on the Bonar appears relatively high when assessed from a New York perspective. Matías Waitzel remarked that “the outcome of the auction of the 6.50% 2029 National Treasury dollar bond was ultimately in line with what the market expected, which means it can be considered a good starting point for future issuances.”
“Specifically, US$1 billion was awarded out of total bids of US$1.42 billion, indicating that demand was robust, albeit somewhat less vigorous than previously speculated. This outcome aids in restoring a degree of investor confidence, as it allows for a return to the dollar debt market without exerting pressure on the Central Bank’s reserves, aligning with the authorities’ objectives,” he explained. He remarked that it “can be described as ‘a good kickoff’ for potential new auctions,” noting that “in a context of seeking orderly refinancing, the bond still came out a few points below the curve, which is a very good sign.” Sailing Inversiones stated that “the auction confirms a successful placement after nearly eight years without access to voluntary dollar financing.”
“Although the 9.26% rate might be viewed as elevated in absolute terms, it appears competitive under Argentine law when juxtaposed with the prevailing prices and yields of sovereign bonds of comparable duration. The market confirmed a narrower spread compared to existing securities, as it attributes greater value to the bullet structure. This structure removes uncertainty regarding interim cash flows and aids in risk assessment,” the brokerage stated. In this context, it observed that “the operation not only allows the immediate January maturities to be covered, but also signals a rebuilding of confidence among institutional investors,” and further stated that “the US$1.4 billion offered is in line with market expectations.”