MercoPress. South Atlantic News Agency

Argentina issues first dollar-denominated bonds in years

The last dollar-denominated issuance occurred in January 2018 under then-President Mauricio Macri

The Argentine Government of President Javier Milei returned to foreign debt markets, raising US$1 billion to cover impending maturities, it was reported Thursday in Buenos Aires. The Economy Ministry auctioned the new BONAR 2029N bond.

The tender, conducted under Argentine law, attracted robust demand, receiving bids totaling over US$1.42 billion from more than 2,500 investors. The Ministry ultimately awarded US$1 billion at a 9.26% annual rate.

The primary purpose of the placement is to proactively manage the country's debt calendar, targeting maturities due on January 9, 2026. Total commitments due early next year amount to roughly US$4.2 billion.

The Libertarian administration hopes to meet these deadlines without drawing down the net Central Bank's (BCRA) net reserves. By avoiding purchasing foreign currency in the local market, the Treasury aims to reduce pressure on the exchange rate and inflation.

The operation was intended to send a signal of stability to the markets, aiming to reduce the country risk index below 500 basis points and fully reopen access to international financing.

The new four-year bond features a 6.5% annual coupon with semi-annual payments and full repayment of principal on November 30, 2029. The awarded yield of 9.26% resulted in a spread of 550 basis points over comparable US Treasury bonds.

According to the Economy Ministry, this yield was about 100 basis points below the yield on existing Argentine bonds of similar duration, reflecting “demonstrated investor confidence in improvements in economic fundamentals.”

The last dollar-denominated issuance occurred in January 2018, when Economy Minister Luis Toto Caputo served as Finance Minister under then-President Mauricio Macri.