Argentina has finally returned back to international credit markets with sale of sovereign bonds on Monday turning end to 15 years of exile since default in 2001. The third largest economy in Latin America intends to raise up to $15 billion through selling bonds. However, huge demand for the bonds has already attracted orders worth $65 billion.
Some of the fund raised through selling bonds will be used for repaying bondholders opposing terms of Argentina's debt restructuring following the default. The recently issued bond money will be repaid within 3 to 30 years depending on the type of the bond. Buyers are being offered with an interest rate in between 6.4% and 8%, reports BBC.
Argentina has been struggling to boost up economic outlook while settling a 15 years' pending lawsuit. A US court has recently paved the way for Argentina to restart borrowing from the international creditors. According to a Business Standard reports, Argentina's new President Mauricio Macri has termed the US court judgment and returning to the international financial fold as a victory.
Argentina has set 6.75% area against a three-year bond while 8% for a tenure of 10 years. A five-year bond has been offered at 7.50% area while 30-year bond at 8.75% area. Deutsche Bank, HSBC, JP Morgan and Santander have been acting as global coordinators on the bond sale while BBVA, Citigroup and UBS are joint book-runners, reports St. Louis Post. Following Macri's extensive campaign in restoring confidence over Argentina, demand for its sovereign bonds has reached sky high. Two teams led by Luis Caputo, the Finance Secretary and his undersecretary Santiago Bausili have met investors in London, New York, Boston, Los Angeles and Washington. During a conference call on Monday with the potential investors, Caputo has predicted carrying junk-bond ratings of B3/B- from Moody's and S&P. Details of the fund raising through selling sovereign bonds will be announced on Tuesday. However, investors have welcomed Argentina following long exile from the international bond markets. Agustin Carstens, head of the Monetary and Financial Committee in International Monetary Fund (IMF) has termed Argentina's returning back as a major step forward for the country. He has also expressed satisfaction since the country is being able to put the house in order. IMF has forecast that Argentina will grow 1% during this year and 2.8% in 2017.
