Argentina will revamp as much as US$ 68.8 billion in foreign law bonds as it restructures its debt, the government said in a decree on Tuesday, paving the way for tense negotiations as the country looks to strike a deal with creditors this month.
Argentina has authorized the sale of US$20 billion in sovereign bonds to be issued under U.S. and British law, according to a decree published in the government gazette on Monday. The bond issuance, to take place under opportune market conditions, is part of the government's 2017 financial program.
Argentina launched a US$7bn two-part bond on Thursday, covering its planned dollar issuance for the year in one fell swoop on the back of more than US$21bn of orders. The deal was the sovereign's third in US dollars since being welcomed back to the international capital markets last year after a protracted fight with creditors, and demand was strong.
Argentina struck an 18-month financing deal worth US$6 billion with six banks on Thursday, Finance Minister Luis Caputo told reporters, saying the government planned to tap international capital markets for US$10 billion in 2017. Sovereign bond issuance will start on Jan. 19, with a sale of US$3 billion to US$5 billion in U.S. dollar-denominated paper.
US District Judge Thomas Griesa has enabled Citibank to process a one-off payment on US dollar-denominated bonds issued under Argentine law, during a hearing held at Manhattan federal court on Friday.
A former chairman of Argentina's central bank board, Aldo Pignanelli considered neighboring Uruguay could be a “trustworthy” option for Argentina to issue sovereign bonds and pay creditors. Uruguay has an outstanding international reputations regarding abiding by contracts and ensuring legal security, added the Argentine banker.
Paraguay sold 1bn (one billion) dollars in 30-year bonds on Monday in New York, its second international debt issue in less than two years. President Horacio Cartes said in a statement that the issue's 6.1% yield is unprecedented for the country, and that the proceeds will be used for highway, building and energy infrastructure, as well as agricultural production.
In its latest edition The Economist writes about Argentina’s debt stand-off, and states this “reflects a teenage attitude that rules are there to be broken”.
Spanish oil major Repsol signed a definitive settlement agreement Thursday with Argentine President Cristina Fernandez's administration, which transferred more than 5 billion dollars in bonds as compensation for the 2012 seizure of Repsol's controlling stake in energy firm YPF.
Brazil, France and Mexico are expected to file papers in the US Supreme Court on Monday backing Argentina in its legal battle with bondholders who refused to take part in debt restructurings from the country's 2002 default, according to a source familiar with the litigation.