Argentina offers new bond to raise US$2 billion amid favorable market conditions

Argentina's government is launching a new debt instrument, the Bonar 2029, in an effort to refinance maturing peso debt and secure up to US$2 billion. This bond is designed to appeal to investors and savers, offering a 6% annual yield with monthly coupon payments and capital repayment on October 31, 2029. It mirrors the structure of its predecessors, the Bonar 2027 and Bonar 2028.

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If you want to know what the government's financial plan is, you have to look at the debt issuance.

Economy Minister Luis Caputo and Finance Secretary Federico Furiase have presented the government's financial program for the remainder of the year and into 2027, aiming to reassure markets about Argentina's payment capacity during an election year. The strategy leverages a significant payment due to bondholders on July 9, encouraging reinvestment. "This is because many people, once they collect the coupon, try to reinvest it," explained Furiase, noting that the initial auction on Wednesday will not have a fixed quota to accommodate potentially higher investor interest.

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This is because many people, once they collect the coupon, try to reinvest it. That's why we're not putting a US$150 million limit on it because, perhaps, there will be more investors interested in reinvesting and the placement will end up being larger.

The issuance comes at a time when Argentine debt is performing strongly in international markets, despite global volatility. Global bonds are offering yields between 7.4% and 8.9%, while the country's risk premium remains near its lowest level since April 2018. Market participants anticipate strong demand for the AO29, building on the success of previous debt auctions.

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If you want to know what the government's financial plan is, you have to look at the debt issuance.