Argentina has declared its desire to issue a local law bond denominated in dollars, taking advantage of the momentum that has been created in the wake of President Javier Milei’s resounding victory in the congressional midterm elections that were held in October. The Ministry of Economy has said that the Bonar bond is scheduled to reach maturity in the month of November in the year 2029. A section of the cash will be used to deal with the impending deadlines of national debt maturities, as stated by Luis Caputo, the Minister of the Economy. In the month of January, Argentina will be required to make bond payments amounting to around 4.5 billion US dollars. Another payment of a similar amount is planned to be made in July. Caputo made the following statement on Friday morning: “A large maturity is coming, and with this bond I’m covering a part of it. The goal is to meet the January maturities while keeping reserves at a stable level,”
In the wake of the surprising victories that were achieved by Milei’s political party in the congressional elections that took place in late October, the markets in Argentina have seen a revitalization. There has been a reduction in yields to approximately 10 percent, which is a premium of around six percentage points above the benchmark US Treasuries. As noted by sources, this places them in proximity to the levels that Caputo has communicated to investors as being potential considerations for the sale of bonds.
The administration has declared that it is “very confident” that the country risk will decrease in the coming weeks and that “we are the closest we’ve ever been to having access to markets,” according to Caputo’s statement this week. He made the observation that the nation has been presented with propositions from financial institutions that total between six and seven billion United States dollars, and it is in the process of evaluating the ideal amount to borrow in order to maintain a consistent level of reserves as a result of the debt commitments that are due in January.
After undergoing its most recent debt restructuring in response to a default, Argentina was able to gain access to global markets for the first time since 2020. A peso-denominated five-year bond was launched in the month of May, with the intention of attracting the attention of overseas investors who were authorized to purchase it using US dollars. The coupon rate for the Bonar bond is six and a half percent, and the payments are made at intervals of every six months. The government is expected to publish the results of the accepted bids on the following Friday, which is the day after Wednesday.