Argentina returns to the capital markets with a $15bn bond issue

Argentina is finalizing it’s return to capital markets with a proposed $15bn bond issuance, the largest by a developing nation since Mexico’s $20bn issue in 1996.

Proceeds would be firstly be utilized towards paying certain creditors in relation to its default on debt in 2001, with further issuances to focus on fiscal spending and towards boosting reserves.

However, investors are speculating on the interest rate that would be offered on the debt, considering the nation’s history of defaults over the last 200 years.

The issuance would be contingent upon approval from the congress and would commence next month, according to Finance Secretary Luis Caputo.

The proposal comes on the backdrop of Argentina’s $4.6bn settlement agreement with certain creditors in relation the nation’s default on debt in 2001. Certain creditors, including Paul Singer’s Elliot Management, refused to restructure the nation’s debt when it defaulted during 2001.

Talks with HSBC, Citi and JP Morgan have begun in London to arrange the sale.

Source: FT