Argentina named BBVA, Citigroup, Deutsche Bank, HSBC, J.P. Morgan, Santander and UBS as joint bookrunners for a possible bond sale, a source familiar with the matter told IFR on Tuesday. The timing and currency of the bond offering are not yet certain but the deal could come to market in early April, the source said. Expectations of a deal have been building since Argentina sealed an agreement with holdout creditors three weeks ago.
Barring any objections from Congress, the republic is likely to try to issue up to US $15bn of bonds in April in an effort to pay litigant investors. "That's the million dollar question," said Sean Newman, a senior portfolio manager at Invesco Fixed Income who oversees emerging market and government bonds. "Ideally they'd like to get US $15bn," Newman said. "But while Argentina stands in that bull's eye of having the right story coming at a better time, it still has significant risks."
Those include a sizeable budget deficit and worries about inflation, as well as US $11.68bn that the government has said it still needs to settle all outstanding debt payments. Citigroup's head of emerging markets Guillermo Mondino wrote this month that an Argentina bond sale could pay yields of 7.25% on a five-year, 8.4% on a 10 and 9.7% on a 30. Newman said yields of around 8% for a 10-year would be realistic.
Comments
Comments are closed.