Argentina confident after first bond in 15 years
By Paul Kilby
NEW YORK, April 21 (IFR) - In raising US$16.5bn in the largest emerging markets bond ever, Argentina finally ended its long-running legal battle with creditors and sloughed off its status as market pariah.
With its first bond deal in 15 years, Argentina raised enough to pay the approximately US$9.3bn owed to holdout investors and still had plenty of funds to spare.
The sovereign can now stay out of the international markets for the rest of this year and fully fund the targeted 2016 deficit of 4.8% of GDP.
Secretary of Finance Luis Caputo told IFR the country would be able to do so through local markets, new multilateral lending and in a "diminishing degree" through central bank financing.
"We will be very active in managing our liabilities, trying to achieve the most cost savings," Caputo said, stressing that the development of local markets will be a priority.
But he declined to rule out another tap this year to pre-fund the country's budget in 2017, when the government hopes to cut the deficit to 3.3% of GDP.
"If down the road we notice through reverse enquiry that investors' demand remains high, and the price is right, we would pre-fund," he said.