UPDATE 1-Buenos Aires attracts solid demand for new bond
(Adds pricing details, investor comments)
By Davide Scigliuzzo
NEW YORK, Feb 11 (IFR) - Investors piled into a new US$500m bond from the City of Buenos Aires on Wednesday, hoping to reap hefty gains if and when Argentina mends fences with international creditors.
Argentina's capital city amassed around US$2bn in orders for the six-year amortizing bond, which priced at par to yield 8.95%.
That was roughly flat to Argentina's own curve and clearly piqued buy-side interest, taking into account the city's stronger financial position and better credentials as a debtor.
"It is still attractive considering that the sovereign could tighten significantly post-settlement (with holdout creditors)," said a New York-based hedge fund manager.
"(The city's bonds) could go back to trading 100bp-200bp tight to the sovereign."
Still not all investors are convinced that now is the time for a debt play in Argentina, where the debt market has already rallied on hopes of a more market-friendly government come presidential elections in October.
"For me, Argentina is too expensive at the moment," said one London-based portfolio manager who did not participate in the deal. Continuación...