Argentina inches closer to bond return

viernes 26 de febrero de 2016 10:44 GYT

By Paul Kilby

NEW YORK, Feb 26 (IFR) - The prospect of a bond sale of up to US$15bn from Argentina - its first international debt issue in more than a decade - is growing nearer as negotiations with the country's holdout creditors approach the finish line.

Argentina could come to market as soon as next month with the lifting of a pari passu injunction preventing debt payments and the nearing of a long-sought deal with heavyweight hedge funds Elliott and Aurelius, which have been battling the sovereign in the courts.

Finance Minister Alfonso Prat Gay said this week that Argentina would issue a US$15bn bond to pay the holdout creditors once the country's Congress had repealed certain debt laws preventing it from offering them better payment terms.

Nullifying those laws - and the payment of all holdout creditors who agree to Argentina's proposal by February 29 - are conditions for lifting the injunction that effectively forced the sovereign to default on its restructured bonds in 2014. That will pave the way for the sovereign's return to the markets.

"We expect the (repeal of those laws) to happen in the first half of March, and then issuance could happen after that," said John Baur, a portfolio manager at Boston-based investment management firm Eaton Vance.

Latin America has seen just US$14.8bn in new supply from five issuers this year, so Argentina's return to the international bond market after 15 years will be a major event.

A deal of the expected size of Argentina's return is rare for the region, even in the most bullish of times, and getting a slice of the action will be vital for DCM bankers who have had to content themselves with slim pickings and falling primary volumes.