UPDATE 3-Argentina bond top-up fails, reserves still under siege

viernes 12 de diciembre de 2014 20:56 GYT
 

(Adds analysis on implications for debt talks)

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 received offers worth just $286 million, far below the $3 billion of Bonar24 paper offered by the government. The economy ministry later said all bids were accepted.

The inflow of dollars from a successful sale would have soothed tensions in Argentina's currency markets going into an election year.

Argentina has used its reserves over the past four years to prop up the currency. They currently stand at $30.2 billion, boosted from a 2014-low of $26.9 bln by currency swap loans from China.

The country's debt servicing costs will double next year to nearly $9 billion, Thomson Reuters calculations show.

Whether Argentina returns to the negotiating table with a small group of U.S. junk debt specialists, whose legal battle led the country to default in July, will almost certainly depend on the state of the stagnating economy.

For that reason, Friday's results may be a setback. Even so, the government's attempt to issue high-yielding debt may indicate President Cristina Fernandez will not offer the "holdout" hedge funds better terms than those already rejected.   Continuación...