NEW YORK, Feb 25 (IFR) - Argentina has begun marketing a new bond issue to non-US investors as it seeks to raise new cash ahead of upcoming maturities and avoid legal risks in the US, according to two people with knowledge of the offering.
The sovereign is offering new Bonar 2024 notes via Deutsche Bank and JP Morgan, targeting primarily hedge funds and real money investors who recently participated into a bond sale from state-run oil company YPF, said the sources.
By opting for a private sale aimed at non-US accounts the sovereign is hoping to sidestep potential hurdles in US courts, which have stopped coupon payments on nearly US$30bn in Argentine debt last year after the sovereign refused to make whole holdout investors from its 2001 default.
One of the two sources said lead managers have been talking about a sale of US$2.7bn, with proceeds going towards the repayment of its Boden 2015 notes, on which the sovereign has around US$6bn outstanding.
“They are talking about US$2.7bn, but in reality they will take as much as they can as this will be used to refinance the Boden 2015s,” said the source, who was asked to participate in the deal.
“We are unlikely to get involved as we bought the initial deal some 20 points below here,” the source said. “And with all the new supply you could see some underperformance, clearly on the existing bonds and on the new supply if they get too greedy on the amount and pricing.”
Argentina is yet to release price indications for the new offering. Its Bonar 2024s were quoted on Wednesday at 104.5-105.0, down by about a point on the day.
The second source said lead managers have been asking investors to buy lot-sizes of between US$50m and US$100m with an initial deal size of at least US$2bn.
Deutsche Bank and JP Morgan declined to comment. (Reporting by Davide Scigliuzzo)