Argentina seeks to issue up to $1.2 billion in bonds, ministry source says

By Jorgelina do Rosario

WASHINGTON (Reuters) -The Argentine government is in talks to issue two dollar-bonds for up to $600 million each with separate guarantees from the World Bank and the CAF as collateral, a source from Argentina’s Economy Ministry said on Friday.

The World Bank and CAF-Development Bank of Latin America could not be immediately reached for comment.

The operation, which would take place in the coming weeks, would guarantee 60% of the issuance, and the notes would have a maximum maturity of five years, said the ministry source, who asked not to be identified.

The intention is to issue two separate bonds, each with its own backing, for up to $600 million each, the source said.

There is no assurance yet that the bonds will be issued.

“What (the guarantee) allows is for the interest rate to be set on the qualification of the banks” and not Argentina’s, said the source.

Argentina’s recently restructured bonds trade in the 30-cents-on-the-dollar area. Annualized inflation stands at 104% and is expected to remain at triple digits until at least the end of the year, while economic output is expected to contract compared with 2022.

Argentine dollar bonds currently yield between 22% and 42% in the debt market.

The South American economy is also seeking $500 million of fresh financing from the World Bank, the source added, additional to the $2.5 billion the multilateral lender already has already committed for 2023.

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