City of Buenos Aires preps return to bond markets

miércoles 9 de marzo de 2016 16:04 GYT

By Paul Kilby

BUENOS AIRES, March 9 (IFR) - The City of Buenos Aires plans to return to the international bond markets this year and has authorization to issue up to US$890m in dollar debt, a government official told IFR on Wednesday.

The borrower is still assessing size and timing, but it could first try a liability management transaction or combine it with a new issue to address a hump in its maturity profile next year, said Nicolas Rosenfeld, the city's director of public credit.

By addressing about US$415m in bond payments falling due in 2017, the city will further improve risk perceptions toward what is one of the strongest quasi-sovereign names in Argentina.

The city's US$500m 8.95% 2021s are currently trading at yields of 7.1%-6.8%, while the federal government's Bonar 2024 notes are quoted at 7.9%-7.8%.

The Province of Buenos Aires, which is considered a weaker credit, was set to price a new amortizing bond with an average life of seven years on Wednesday at a yield of 9.375%.

The city's government has authorization to issue US$500m in new money plus another US$390m left over from a planned liability management transaction that never took place last year.

Proceeds from any bond deal are slated for long-term investments in the city.

"We don't raise debt to pay expenses but for projects and to increase our production capacity," said Rosenfeld.   Continuación...