Argentina provinces prep bonds amid upbeat tone

miércoles 10 de febrero de 2016 15:33 GYT

By Paul Kilby

NEW YORK, Feb 10 (IFR) - A string of Argentine provinces are lining up to issue dollar bonds in the next few months to take advantage of windows of opportunity created by the growing prospect of a negotiated settlement between the Argentinian government and holdouts.

At least three provinces are reportedly preparing to tap the dollar bond markets this month or next.

Argentine debt prices largely outperformed this week, despite a broader market selloff, on news two of the six principal holdouts had signed on to a US$6.5bn offer from the government.

And this positive jump in prices has created a decent opportunity for these provinces, said bankers.

"Today might not be the right day, but the provinces will prepare themselves to benefit from any tailwinds from a resolution with the holdouts to tap the market," said a DCM banker.

The province of Buenos Aires is expected to come first with local papers reporting that Citibank, JP Morgan and HSBC have been mandated on an up to US$500m bond deal for which the borrower hopes to pay anywhere between 9%-9.5%.

Those levels may seem high, but they are a vast improvement on the 11.7% yield seen on the province's 9.95% 2021s in early October when the presidential election was still in full swing and the less market friendly candidate Daniel Scioli looked set to win.

Those bonds are now trading around 8.90-8.60%, which should put the borrower within reach of its pricing target.   Continuación...