(Recasts with bond auction results)
BUENOS AIRES, Oct 6 (Reuters) - Argentina raised $669.26 million on Tuesday from the sale of a new bond due in 2020, the economy ministry said, as the country seeks to replenish foreign reserves after a huge bond payout.
Appetite for the dollar-denominated notes is likely to have disappointed the cash-strapped government, which had initially said it would raise $500 million but later said it could target triple that amount.
Argentina, Latin America’s No. 3 economy, relies on foreign reserves to finance imports and prop up its currency. Those reserves fell 14.6 percent to $27.71 billion on Monday when the government made a $5.9 billion payment on maturing Boden 15 bonds.
Traders had said before the auction that there was appetite for the note but that the government would have to accept double-digit yields.
In the end, offers totaled $812.72 million, with bids ranging from 12.07 percent to 7.50 percent. The note carries an 8 percent coupon.
Needing to plug the fall in reserves and finance a surge in spending, the Bonar 20 is the first of three debt auctions planned this week, with all the notes being governed by Argentine law.
Tuesday’s sale came against the backdrop of capital flight from emerging markets, spurred by fears of tighter U.S. credit, China’s economic slowdown and a collapse in commodity prices, analysts said. (Reporting by Jorge Otaola; Writing by Sarah Marsh and Richard Lough; Editing by Tom Brown)