The government issued a 100-year dollar bond in the international market, the Minister of Finance announced today on his official Twitter account.
Argentina anuncia una emisión de bonos en dólares a 100 años de plazo. pic.twitter.com/s4sEQOggWR
— Ministerio Finanzas (@MinFinanzas) 19 de junio de 2017
The bond was placed by HSBC, Citibank, Santander and Nomura, according to La Nación. It is the longest public title in Argentina’s history. The only antecedent in Latin America is Mexico, which has a 100-year bond in dollars, euros, and sterling pounds.
Martín Anidjar, managing partner of Baffin Advisors in New York, thinks that insurance companies will be keen on the investment. Investors managed to raise 9,000 million dollars by noon. The interest rate in New York is 8.25 percent for now, though the final cut will be determined this afternoon when the Ministry of Finance will reveal more details. Sources linked to the underwriting anticipate that the rate will surely fall below eight percent. The bond’s main underwriters are HSBC and Citi, who are structuring and selling the bond with help from Santander and Nomura. Mutual funds from New York, Boston, Los Angeles and London are among the buyers.
Borrowing for so long at such high interest is risky, according to some experts. “We’ve never gone more than 50 years without default,” said Sebastián Maril of Research for Traders. But others are optimistic. “Countries tend to do this as a sign of confidence,” said Anidjar. Former Finance Secretary Miguel Kiguel agrees. “It’s more symbolic than concrete,” he said. “It shows that the market is there, and that if the rate of Argentine bonds is expected to lower, that won’t happen for a long time.”