\t\t\t \t\t\t\t\t \t\t\t\t\t After nearly eight years out of foreign-currency financing markets, Argentina\u2019s Treasury announced the result of its auction: it issued US$1 billion of a new four-year bond, carrying a 6.5% coupon, under Argentine law. More than US$1.4 billion in bids were received from over 2,500 investors. The yield at the cut-off price came to an annual rate of 9.26%.<\/p>\n
\u201cThe 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,\u201d the Economy Ministry said.<\/p>\n
\u201cThis reflects the value assigned to the market structure \u2014 with full amortization at maturity \u2014 and investors\u2019 demonstrated confidence in the improvement of economic fundamentals.\u201d\u00a0<\/p>\n
The yield came in slightly above what Minister Luis Caputo had expected. On Tuesday he told investors at a meeting that the Treasury team was aiming for financing at a final yield slightly below or equal to 9% annually.<\/p>\n
Market participants were confident the government would be able to complete the placement, whose proceeds will be used to cover the maturity of Bonares coming due in January 2026. That maturity totals about US$1.2 billion. Another US$3.6 billion is yet to be resolved.<\/p>\n
But beyond Buenos Aires testing a pure dollar issuance with bonds under local law, the Finance team is undertaking a more important test: gauging the possibility of returning to markets without needing to have accumulated international reserves. The yield offered on the Bonar would still look somewhat expensive in New York.<\/p>\n
Mat\u00edas Waitzel, partner at AT Inversiones, said that \u201cthe 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.\u201d<\/p>\n
\u201cSpecifically, US$1 billion was awarded out of total bids of US$1.42 billion, which shows that demand was solid though more moderate than rumored. This result helps rebuild some investor confidence, by returning to the dollar debt market without straining the reserves of the Central Bank, just as the authorities had intended,\u201d he explained.<\/p>\n
He added that it \u201ccan be described as \u2018a good kickoff\u2019 for potential new auctions,\u201d since \u201cin a context of seeking orderly refinancing, the bond still came out a few points below the curve, which is a very good sign.\u201d<\/p>\n
Sailing Inversiones said that \u201cthe auction confirms a successful placement after nearly eight years without access to voluntary dollar financing.\u201d<\/p>\n
\u201cWhile the 9.26% rate may be perceived as high in absolute terms, it looks competitive under Argentine law when compared with the current prices and yields of sovereign bonds of similar duration. The market validated a lower spread than that on existing securities precisely because it assigns additional value to the bullet structure, which eliminates uncertainty over interim cash flows and facilitates risk analysis,\u201d the brokerage said.<\/p>\n
In that regard, it noted that \u201cthe operation not only allows the immediate January maturities to be covered, but also signals a rebuilding of confidence among institutional investors,\u201d and added that \u201cthe US$1.4 billion offered is in line with market expectations.\u201d<\/p>\n
Originally published on \u00c1mbito \t\t\t\t\t \t\t\t\t<\/p>\n","protected":false},"excerpt":{"rendered":"
After nearly eight years out of foreign-currency financing markets, Argentina\u2019s Treasury announced the result of its auction: it issued US$1 billion of a new four-year bond, carrying a 6.5% coupon, under Argentine law. More than US$1.4 billion in bids were received from over 2,500 investors. The yield at the cut-off price came to an annual […]<\/p>\n","protected":false},"author":246,"featured_media":16580,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5304,5305,62,42,63],"tags":[5302,5303,95,96,1692],"class_list":["post-16579","post","type-post","status-publish","format-standard","has-post-thumbnail","category-argentina-returns-to-dollar-debt-market","category-bonares","category-dollar-peso","category-economics","category-markets","tag-argentina-returns-to-dollar-debt-market","tag-bonares","tag-dollar-peso","tag-economics","tag-markets"],"_links":{"self":[{"href":"https:\/\/service.codeus.ca\/index.php\/wp-json\/wp\/v2\/posts\/16579","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/service.codeus.ca\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/service.codeus.ca\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/service.codeus.ca\/index.php\/wp-json\/wp\/v2\/users\/246"}],"replies":[{"embeddable":true,"href":"https:\/\/service.codeus.ca\/index.php\/wp-json\/wp\/v2\/comments?post=16579"}],"version-history":[{"count":0,"href":"https:\/\/service.codeus.ca\/index.php\/wp-json\/wp\/v2\/posts\/16579\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/service.codeus.ca\/index.php\/wp-json\/wp\/v2\/media\/16580"}],"wp:attachment":[{"href":"https:\/\/service.codeus.ca\/index.php\/wp-json\/wp\/v2\/media?parent=16579"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/service.codeus.ca\/index.php\/wp-json\/wp\/v2\/categories?post=16579"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/service.codeus.ca\/index.php\/wp-json\/wp\/v2\/tags?post=16579"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}