Milei celebrates as Argentina pays US$4.3 billion to bondholders

Argentina’s government paid more than US$4 billion to international bondholders on Thursday, marking another step in President Javier Milei’s efforts to restore investor confidence.

The government had US$4.341 billion worth of debt, between principal and interest payments, due on a slate of hard-currency notes,  restructured in 2020 by former economy minister Martín Guzmán. The payment included some US$2.65 billion of credits issued under New York law in a 2020 restructuring. 

The government had previously announced that it would meet its debt obligations. Despite a chronic shortage of cash, authorities pledged to have the money ready months ago, saying in July and October that they’d tap funds available from fiscal surpluses and the country’s international reserves.

The tab, roughly double the amount paid to creditors last year, follows the government’s unveiling of a US$1-billion repurchase agreement last week with five top banks, including JPMorgan Chase & Co and Citigroup Inc, that will buttress the country’s treasure chest of dollars for future debt payments this year. This could pave the way for more favourable international financing conditions.

President Javier Milei highlighted the repayments on social media, writing: "Debts must be paid. Long live freedom!"

Finance Secretary Pablo Quirno, in a post on X, said: "They say promises are debts… in this case, PAID!"

Making the repayments is a significant milestone for the Milei government, which views it as a strong signal to the markets.  

Argentina faces repayments totalling US$18.5 billion this year and will need to seek alternative financing options. Of this, nearly US$ 6 billion is tied to the nation’s US$44.5-billion IMF loan programme, which will likely be refinanced under a new agreement, which is under negotiation.

Quirno has previously assured that Economy Minister Luis Caputo has the funds to meet all payments due until June.

The bond payments made Thursday included  Bonares (AL29, AL30, AL35, AL38, and AL41), euro-denominated global bonds (GE29, GE30, GE35, GE38, GE41, and GE46), and US dollar-denominated bonds (GD29, GD30, GD35, GD38, and GD41).

– TIMES/NA/BLOOMBERG