Luis Caputo is reviving a plan to raise US$2 billion through a new hard-currency bond to help refinance debt payments amidst pressure on Argentina's reserves.
In response to challenges related to refinancing external debt payments and pressures on Argentina's reserves, Economy Minister Luis Caputo has revived his plan to secure hard currency. This involves issuing a new bond that is due in 2027, during the ongoing government term, targeting a total of up to US$2 billion to manage upcoming capital repayments for bonds maturing on July 9th.
This comes as Caputo makes a second attempt to gauge market conditions after a mixed outcome in December, where the Treasury faced high interest rates for a similar bond issue. By launching this new bond issuance, he aims to take advantage of the current favorable financial climate to attract 'argendollars'—a term for private deposits in savings accounts and time deposits in Argentina, which currently yield an average annual rate of 2% and have reached a record US$ 38 billion.
Caputo's focus on acquiring these dollars is critical, given the hurdles he faces in returning to international bond markets, reflecting the broader economic challenges in Argentina. The ability to gather 'argendollars' not only assists in debt management but also underscores the complexities of Argentina's financial landscape and the reliance on local currency strategies amid external market constraints.
