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ECONOMY | 02-05-2024 16:40

City officials to meet investors as Buenos Aires weighs global bond sale

Officials from Buenos Aires City government will meet with global investors next week as it explores selling overseas dollar bonds for the first time in eight years.

The Buenos Aires City government plans to meet with global investors next week as it explores selling overseas dollar bonds for the first time in eight years, according to people familiar with the matter. 

Officials from Argentina’s capital will visit New York and London during a week-long non-deal roadshow starting Monday, the people said, asking not to be identified as the meetings aren’t public. HSBC Holdings PLC is organising the trip. 

Representatives for the city declined to comment and HSBC didn’t reply to messages seeking comment.

City finance officials will provide a credit overview as they gauge demand for a potential bond sale, the people said. Buenos Aires is evaluating issuing debt to refinance its US$890-million bond maturing in 2027. A US$330-million payment on principal and interest comes due on that bond in June 2025. 

Argentina’s richest city has one of the strongest credit profiles of any of the nation’s sub-sovereign bond issuers and has avoided the defaults that have plagued the nation. The notes due in 2027, which trade for around 97.5 cents on the dollar, yield around 377 basis points over US Treasuries.

The city is separate from Argentina’s provinces — including Buenos Aires Province — which are facing severe financial pressure. President Javier Milei cut transfers of federal aid to provinces and Congress has yet to approve a personal income tax that would provide fresh revenue. 

One small province, La Rioja, has already defaulted and is currently embroiled in a legal battle with creditors in New York.

The trip comes in the wake of a flurry of corporate debt sales from Argentine companies, including oil drillers YPF SA and Pan American Energy LLC. Other energy firms, such as MSU Energy SA and Transportadora de Gas del Sur SA, are exploring a new window to issue in the international market.

The sales reflect how investors are becoming more comfortable with Milei’s bid to radically reshape the nation’s economy, pushing the prices for sovereign bonds to levels not seen since the last restructuring.

by Ignacio Olivera Doll, Bloomberg

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