Tue | Jul 17, 2018

Argentina returns to international credit markets

Published:Wednesday | April 20, 2016 | 12:00 AM

Argentina has returned to global bond markets for the first time in 15 years.

The South American country initially announced a US$10-billion-US$15-billion bond issue, but the offer on Tuesday was bigger at US$16.5 billion.

They amassed offers of US$68 billion, or just about four times the amount available for subscription, marking a triumphant return to the market

The proceeds will help pay a small group of holdout creditors who refused debt restructurings after Argentina suffered its worst economic crisis and defaulted on US$100 billion of bonds in 2001. The holdouts spent more than a decade litigating for payment in full rather than agreeing to provide Argentina with debt relief. They also sent lawyers around the globe trying to force Argentina to pay its defaulted debts and were able to get a court in Ghana to temporarily seize an Argentine naval training ship.

Former Argentine President Cristina Fernandez refused to negotiate with the creditors, often calling them "vultures". But President Mauricio Macri campaigned last year on promises to boost the continent's second-largest economy by putting an end to the long-standing debt dispute.

The recent repayment deal broke an impasse that had warded off investors and kept Argentina on the margins of international credit markets, forcing it to print more money that stoked one of the world's highest inflation rates.


"We've finally come out of years of financial conflicts with the world," Macri told local businessmen at a conference on Monday.

Argentina's economy minister and other officials have been meeting investors in New York and London.

On Tuesday, Argentina sold a US$6.5-billion 10-year bond at 7.5 per cent, a US$2.75-billion three-year bond at 6.25 per cent, a US$4.5-billion five-year bond at 6.875 per cent, and a US$2.75-billion 30-year bond at 8.0 per cent with a coupon of 7.625 per cent.

The bond sale is being coordinated by Deutsche Bank, HSBC, JP Morgan and Santander, BBVA, Citigroup and UBS as joint bookrunners.

- Wire reports