Today, the federal government formally issued International Bond 2117, placed last week for US $2.75 billion. The Official Gazette released this statement just one day after federal prosecutor Juan Pedro Zoni charged Finance Minister Luis Caputo with “possible criminal damage from the fraudulent administration to the national state” for issuing the 100-year bond.
At least 13 members of the Frente para la Victoria lodged an initial complaint before Federal Judge Ariel Lijo. They formalized broader concerns that the bond’s unprecedented duration and the high-interest rate will incur high levels of debt. Zoni then pleaded with Lijo to open an investigation into the operation.
Caputo was quick to reject the opposition’s claim. “The international markets support Macri’s gradualist method,” he said in an interview with Infobae last week. “Otherwise, they would not buy Argentine bonds.” He took the press opportunity to criticize ex-President Cristina Kirchner. “The previous government refused to finance this,” he said. “They left us without reserves and released pesos from the Central Bank in an uncontrolled manner. They placed bonds to Venezuela at 15 percent interest and complain because we pay 7.125 percent.” Caputo pointed out that Argentina is entitled to redeem the bonds, in whole or in part, at any time before they reach maturity.
Meanwhile, the bond is in full force. The government approved expenses necessary to carry out the operation, such as translation and printing, for US $718,348.62. It designated banks Citigroup, HSBC, Nomura and Santander as “joint settlers” of the transaction. It also named the Bank of the Argentine Nation agent of the process in New York. “The few criticisms out here are just political arguments or from lack of knowledge,” said Caputo. “Economists who oppose the bond clearly do not understand finance.”