JPMorgan courts Argentina by readily refilling stash of dollars

With just days to go before Argentina had to pay billions in debt to bondholders, President Javier Milei turned to a familiar face for help.

Bankers at JPMorgan Chase & Co ultimately chipped in about US$340 million as part of a multi-bank repurchase agreement this month that handed Argentina much-needed cash. The deal has brought the bank’s total exposure to Argentina to about US$2 billion, its highest level in a decade, according to people familiar with the matter.

It’s the third time in less than a year that JPMorgan has stepped forward to bolster the Latin American country’s dwindling stash of dollars. The series of transactions shows Argentina – which has reneged on its debt nine times since its independence in 1816 – is once again drawing the attention of Wall Street after lenders spent years on the sidelines.

With Economy Minister Luis Caputo focused on preparing for Argentina’s return to international bond markets, banks are jostling for a chance to reap tens of millions of dollars in fees as the country looks to satisfy the vast investor appetite for Argentine debt.

“Investment banks see Argentina as a fertile market for the future,” said Miguel Kiguel, Argentina’s finance undersecretary from 1996 to 1999. “The repo itself is business, but the real opportunity comes when Argentina starts placing bonds.”

No-one is rolling out the welcome mat more than JPMorgan. The company in March will co-host the country’s first-ever Argentina week at its new headquarters in New York City, a chance for President Javier Milei and his economic team – a group packed with some of the bank’s own alumni – to hobnob with investors, energy executives and technology leaders.

Though it still hasn’t cracked the top 20 country exposures that JPMorgan details in its quarterly regulatory filings, Argentina has grown to become a major market for the Wall Street giant. The firm now employs nearly 4,000 people in Buenos Aires alone – making the capital its largest hub in Latin America. The company also recently signed a new lease to take an additional 20 floors of office space in the city.

Historical ties

JPMorgan’s history in Argentina stretches back to the 19th century, when one of its predecessor firms subscribed to a loan to the government. A different predecessor opened an office in Buenos Aires in 1929.

At the start of this century, Argentina carried out the biggest sovereign default ever and spent the ensuing decade in a bruising legal battle with the hedge fund billionaire Paul Singer over repayment. During that time, Argentina had become something of a pariah state, unable to fly its presidential plane or dock its naval ships in some cities abroad out of fear they’d be seized by Singer’s lawyers.

By 2016, with the Singer saga behind it, Argentina returned to global markets and JPMorgan was there: The bank co-led the country’s return via a US$16.5-billion debt offering.

The bank has a strong alumni network at some of the highest ranks of Argentina’s government. Caputo himself built his career as a trader at JPMorgan in the 1990s before moving to Deutsche Bank AG and later entering public service. As Caputo’s influence within the administration has grown, his aides – often hailing from JPMorgan as well – have moved into senior roles across the Treasury, the Central Bank and the Foreign Ministry.

Those ties have put the bank on better footing to win business as Argentina makes its way back to markets. But that overlap has drawn criticism from the political opposition, which argues the government is prioritising financial deals over the economy, which is still suffering from weak growth. And Caputo has even acknowledged that the country should reduce its dependency on Wall Street over the long run, even if it still needs to tap those banks for now.

“Caputo and his team know their own minds – they don’t need Wall Street bankers telling them what to do,” said Gregory Makoff, a former banker who has chronicled Argentina’s recent defaults. “For them, banks were just stopping places.”

The libertarian’s early move to bring the fiscal accounts into a primary surplus, along with recent steps to rebuild foreign-currency reserves, has helped push Argentina’s hard-currency sovereign bond spreads to the lowest level in seven years – a shift that is increasingly bringing a return to international borrowing into view.

Critical moments

The country has also been helped by the US at critical moments. As US President Donald Trump’s administration tried to stem a market sell-off before Argentina’s midterm elections, the bank bought pesos on behalf of the US Treasury to shore up Milei’s currency. The libertarian’s party stormed to victory in the midterm vote, validating the historic rescue package.

The US Treasury also sought to arrange a US$20-billion facility with Wall Street as part of a lifeline, but plans were shelved as Milei’s win in midterm elections stabilized markets.

At the time, JPMorgan Chief Executive Officer Jamie Dimon told Reuters that the full US$20 billion in private-sector financing “may not be necessary,” but added that “we have done special financing to Argentina in the past; if they need that, we’re all ears.”

In addition to this month’s repurchase agreement, JPMorgan has been involved across multiple parts of Argentina’s market reopening. For starters, the company is working on what could become one of the country’s largest-ever project finance transactions, seeking to raise as much as $14 billion for state-owned oil and gas company YPF SA.

The bank was appointed in October to help structure a debt-for-education exchange, led hard-currency bond issuances for Argentine corporates in 2024 and was among the top three underwriters last year, according to data compiled by Bloomberg.

“JPMorgan is very active in the Argentine market,” said Marcos Buscaglia, a co-founder of consulting firm Alberdi Partners. “The bank has deep ties to the country and to the economic team, along with a large local back-office operation and senior executives who happen to be Argentine – factors that, put together, give JPMorgan strong incentives to stay involved.”