Argentina plans to mark its return to global capital markets in mid-April by issuing $11.68 billion of bonds to yield 7.5 to 8 percent, Finance Ministry officials told Congress while presenting a debt bill to clear the way for a settlement with most holdout creditors.
After reaching a milestone deal with the largest holdout creditors led by billionaire Paul Singer, Argentina must repeal debt laws that prevent it from reopening previous bond restructurings and paying bondholders abroad. U.S. District Judge Thomas Griesa said this week that he’ll lift an injunction blocking the country from paying foreign debt once Congress acts and the settlements are paid.
South America’s second-largest country will issue three bonds with maturities of 5, 10 and 30 years in mid-April, close to the April 14 deadline set to make good on payments to creditors, Finance Secretary Luis Caputo said.
The government, which will sell the bonds under New York law, expects yields to fall to about 6 percent in the short term on ratings upgrades and on improving outlooks for the country’s fiscal and monetary situation, he said.
“We’re not exempt from what happens in the world but given the current situation, there is a phenomenal demand for Argentine credit,” Caputo said. “We’re not going to have any problem, according to banks and investors, in attracting this money in order to normalize payments.”
President Mauricio Macri has moved swiftly to regain market access and untangle economic controls on the peso and trade since taking office on Dec. 10 in a bid to stoke growth in South America’s second-largest economy.
The nation has been locked out of global markets since a record $95 billion default in 2001 and has been unable to pay holders of restructured foreign law bonds since another cessation of payments in July 2014 due to the court orders.
Argentina to sell $11.7bn bonds to yield 8 per cent