UPDATE 2-Argentina bond top-up disappoints, pressure still on reserves

viernes 12 de diciembre de 2014 18:56 GYT

(Adds analyst comment, context)

By Sarah Marsh and Richard Lough

BUENOS AIRES Dec 12 (Reuters) - Argentina's first dollar-denominated bond issue since it defaulted on its debt in July has flopped, dealing a blow to government efforts to shore up its low foreign reserves.

Economy Minister Axel Kicillof said on Friday that Argentina had received offers worth just $286 million, far below the $3 billion of Bonar24 paper offered by the government. He did not say if the government had accepted those bids.

A successful sale would have provided some short-term relief ahead of next year, when Argentina's debt payments in foreign currency next year will double to just under $9 billion, according to Thomson Reuters calculations.

"If they had sold $3 billion, it would have given the government extra financial room to confront 2015," said Alejo Costa of Buenos Aires investment bank Puente. "Whereas right now, between the top-up and the swap they are going to save less than $700 million; it doesn't really move the needle."

Embroiled in a long legal battle with a small group of U.S. creditors over unpaid debt from 2002, the government wants to show investors it is willing and able to meet its debt obligations, even with foreign reserves standing at $30 billion.

When he announced the Bonar24 top on Dec. 4, Kicillof also said holders of another dollar bond due next year could take early payment or swap it out for the Bonar24. Analysts saw the debt swap as a way for Argentina to ease its debt schedule next year.

On Friday, the minister said investors holding $377 million worth of Boden15 notes due next year had opted to swap out their bonds for the Bonar24 paper maturing in 2024. Other creditors holding $285 million worth of the Boden15 took the offer of advance payment.   Continuación...