Argentina sold local currency debt to foreign investors, raising roughly US$1 billion that will help boost Central Bank reserves a month after President Javier Milei’s government lifted most currency controls.
The five-year peso bonds carry a coupon of 29.5 percent, more than what some local banks had expected, Finance Secretary Pablo Quirno said in a social media post on Wednesday evening. The notes also include a two-year put option, offering investors an early exit before another presidential vote takes place in 2027.
The auction, hailed by the government as a return to global markets after a sovereign debt restructuring during the Covid-19 pandemic, is the first time since President Mauricio Macri’s term that Argentina has issued local debt directed almost exclusively at Wall Street.
It’s also part of a broader strategy by Milei’s team to bolster the country’s war chest of hard-currency reserves ahead of a key deadline under its US$20-billion agreement with the International Monetary Fund. Quirno added that the country’s treasury received 146 offers from foreign investors tallied at some US$1.7 billion.
Authorities also sold a range of peso instruments to domestic investors including short-term notes maturing between June and November 2025 and some bonds maturing next year.
Investors have lauded the government’s efforts to tame inflation and reverse years of budget deficits, all while chasing economic growth — challenges that proved elusive for Milei’s predecessors.
But for all of the optimism, the libertarian leader still faces a slew of hurdles. The Central Bank’s total reserves have ticked down since the IMF sent a US$12-billion disbursement last month. And so far, Milei has dismissed the need to build up reserves, citing the country’s floating exchange rate.
As part of its IMF deal unveiled in April, Argentina agreed to amass some US$4.4 billion in net international reserves between the end of March and mid-June. Private estimates indicate the monetary authority remains significantly short of that goal.
by Kevin Simauchi & Ignacio Olivera Doll, Bloomberg
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