Argentina looks to global debt markets to finance energy boom

Argentina’s corporate borrowers are turning to global debt markets with a different goal this year – funding an energy-driven expansion rather than patching up balance sheets battered by years of crisis.

Investment in energy and related infrastructure in Argentina could reach US$60 billion over the next five years, according to estimates from Goldman Sachs, as companies look to build up infrastructure in the Vaca Muerta oil and gas field, one of the world’s largest spanning roughly 30,000 square kilometres in Patagonia. Most of that money will have to come from abroad, bankers at Wall Street’s main firms said, signaling strong momentum for Argentine foreign bond sales. 

“We are entering a strong, capital-intensive investment cycle to develop Vaca Muerta, the surrounding infrastructure, and mining and power,” said Lisandro Miguens, head of Latin America Debt Capital Markets at JPMorgan. “This will lead to primary market issuance to finance capex rather than refinancing maturities.”

Output from Vaca Muerta stands at about 600,000 barrels of oil per day. Industry players are targeting production of more than one million barrels per day by 2030 as infrastructure is developed around the basin, which holds the world’s fourth-largest shale oil reserves and second-largest shale gas reserves.

Soaring sales

Vaca Muerta and a nascent mining sector are central to President Javier Milei’s strategy to boost foreign earnings. Energy exports totalled US$11.1 billion last year and are projected by the government to triple to US$36.7 billion by the end of the decade as pipelines and export terminals come online. Already, rising energy shipments from Vaca Muerta and a wave of dollar borrowing by local companies are helping the country’s battered currency outperform. 

Argentine companies, which tapped markets with a flurry of deals to rollover debt last year, issued US$2.1 billion of dollar bonds in the first three months of 2026. While that may not seem much by global standards, it marked the busiest first quarter for local companies since 2017. 

Gas transporter TGS announced last month US$3 billion of infrastructure investments. JPMorgan is also working on what could become Argentina’s largest project finance deal, seeking to raise roughly US$14 billion for state-owned oil company YPF SA. Meanwhile, JPMorgan and Citigroup are in talks to finance a US$1-billion pipeline.

Iran war

The war in Iran dented the rebound in bond sales last month, but is unlikely to stall emissions for long, especially given the new interest in energy sources.

“The pipeline remains strong, and once the market absorbs the impact of the war and oil prices stabilize, it should still be a solid year for debt in Latin America,” said Adrián Guzzoni, head of regional debt capital markets at Citigroup. “The appetite is there, and any Argentine corporate seeking financing will find the market open.”

As long as volatility subsides, he said, 2026 should be in line with last year’s decade-high volumes. “Or even better,” he added. 

While corporate issuance has been active, Argentina itself has yet to return to the market. 

“The market is open for Argentina to issue,” said Sebastián Loketek, head of Southern Cone investment banking at Bank of America. “It’s really a matter of when the government wants to do it, depending on the rate they are comfortable with.”

With bond spreads near 600 basis points, the government has opted to rely on reserve purchases and local sources for financing until now. Economy Minister Luis Caputo has argued Argentina should be able to borrow at significantly lower levels, closer to 250 to 300 basis points over US Treasuries, reflecting the country’s fiscal adjustment and macro stabilisation. 

Investors, however, see those levels as out of reach anytime soon and argue the government missed a window earlier in January, when spreads hit an eight-year low.

“I believe that when the next window opens, they should come out,” Loketek said. “Argentina’s country risk is clearly high and has room to tighten.”