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Bond Market News
Argentina Negotiating $2.7bn Loan to Meet Debt Obligations
October 24, 2024
Argentina is negotiating a loan of ~$2.7bn with banks, primarily Banco Santander and JPMorgan Chase, to address its principal debt obligations coming due in January. This loan is part of a repo line facilitated by Argentina’s central bank, but specifics regarding the amount from each bank and the collateral are not known. The President and his economic team are attending an IMF meeting this week with a vision for a new program but negotiations are yet to begin. Argentina’s existing $44bn IMF program, negotiated by the previous administration, is the largest in the IMF’s history. The current government hopes to leverage the IMF’s support to lift capital and currency controls and stimulate economic growth. Argentina’s Economy Minister Luis Caputo is said to be exploring various options to ease capital controls, even without a new IMF program. He anticipates inflation aligning with the peso’s devaluation rate and hinted at adopting a flexible exchange rate once controls are lifted.
Argentina’s dollar bonds trade stable, but have been trending higher over the past month – its 4.125% 2035s have risen over 5 points in October and currently trade at 53.3, yielding 12%.
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