Markets braced for US$30bn Argentina surge

viernes 11 de marzo de 2016 14:00 GYT

By Paul Kilby and Davide Scigliuzzo

BUENOS AIRES, March 11 (IFR) - Argentina's progress in settling a 15-year old battle with creditors could unlock more than US$30bn of new bond sales out of the South American country this year, as local governments and corporates join the sovereign in a rush to the capital markets.

The federal government alone is expected to tap foreign bond investors this year for anywhere between US$20bn and US$25bn as it seeks to make good on payments with litigant creditors, pay past due interest stemming from its 2014 default and cover a gaping fiscal deficit.

Provinces are likely to follow closely behind with bankers estimating another US$3bn-$5bn in new supply from local governments as they try to fund their own fiscal holes, refinance outstanding debt and garner funds for much-needed investments in infrastructure.

"The message from the federal governments is go out there and tap the market," a Buenos Aires-based banker told IFR. "Don't depend on the government."

The cash-starved Province of Buenos Aires jumped ahead of the crowd on Wednesday, taking advantage of positive sentiment to raise US$1.25bn through a new seven-year bond that priced at a yield of 9.375%.

The western province of Mendoza, which boasts rich mining and oil resources in addition to its Malbec vines, is also thought to be close to coming to market with a bond sale of up to US$500m after it recently met investors in New York, said market participants.

Provincial governments in Cordoba, Chubut, Santa Fe, Neuquen and Salta are also on bankers' maps as potential candidates for new bond issues.

Cordoba, which has some US$600m in US dollar bonds falling due in 2017, could come with an issue of up to US$1bn, said one analyst.   Continuación...