Buenos Aires back in market after year's hiatus

martes 24 de mayo de 2016 11:37 GYT

By Paul Kilby

NEW YORK, May 24 (IFR) - The City of Buenos Aires was poised to price an up to US$890m 11-year amortizing bond on Tuesday, its first deal in the capital markets in more than a year.

Taking advantage of recent spread tightening, Argentina's capital city was approaching investors with initial price thoughts of high 7s on a bond with a 10-year average life.

In February 2015 it paid an 8.95% yield on a six-year amortizing 2021 that has since tightened to 6.5% following the government's agreement with holdout investors, which reopened Argentina's access to hard-currency funding.

Yet while the metropolis is seen as the country's economic powerhouse, some think such levels may be overly ambitious amid a surge of supply from other provincial issuers at higher rates.

"The city always prices better than the rest of the provinces," a syndicate manager away from the deal told IFR.

"The only drawback is that you have other provinces printing in the mid 8s."

The provinces of Neuquen, Mendoza and Buenos Aires have all tapped the international market over the last few months, and more are expected. But not all have performed well.

Mendoza's new 2024s are trading at a mid-market price of around 98.00 or a yield of 8.77% after pricing earlier this month at 98.71 to yield 8.625%.   Continuación...