Argentina prepares return to euro market

viernes 23 de septiembre de 2016 14:46 GYT

By Paul Kilby and Robert Hogg

NEW YORK, Sept 23 (IFR) - Argentina is poised to issue its first euro-denominated bonds in 15 years as the sovereign continues its rehabilitation in the capital markets.

The country is expected to come with a relatively small dual-tranche trade that could reach around 1.5bn.

It will be Argentina's third cross-border offering this year as it tackles hefty funding needs, having already raised US$19.25bn from its first year in the international debt market since 2001.

Investors like the government's turnaround story. But with substantial requirements ahead, the administration of President Mauricio Macri needs to find alternative funding sources if it wants to ease supply pressures in its core US dollar market.

"It has become clearer that the pace of fiscal adjustment is going to be more gradual than originally expected and they will continue to need funding next year," said Alejo Czerwonko, an emerging markets economist at UBS Wealth Management.

Finance Minister Alfonso Prat-Gay was quoted this week as saying that the country would not issue more than US$10bn-$15bn in international debt next year.

"If they are going to come back next year for another US$10bn-$15bn, they'll want to start funding in different places," said a New York-based syndicate manager.

While accounts have been receptive buyers of Argentine dollar debt amid a global hunt for yield, patience in the dollar market may wear thin should the government abuse its welcome there.   Continuación...