Argentina

Bankers and analysts were confident that Argentina will find the demand it needs for a triumphant return to international capital markets after the mediator in its debt dispute said that the 15 year legal battle between the country and leading holdout creditors is nearing a solution.

Argentina’s nearing return to international bond markets after more than 15 years away could drive the Province of Buenos Aires to get its bond funding out the way as soon as possible to avoid clashing with the up to $15bn of sovereign supply in the pipeline.

Lat Am bond bankers said the seven banks understood to have led Argentina’s repo trade in December were the strongest candidates to lead the sovereign’s seemingly imminent re-entry into international capital markets.

Argentina's finance minister, Alfonso Prat-Gay’s announcement that the country would issue up to $15bn of bonds to pay holdout investors cooled enthusiasm for the sovereign’s existing debt on Tuesday.

Argentina may be able to access international capital markets even if US creditors continue to reject restructuring proposals, said analysts this week.

Argentina may be able to access international capital markets even if US creditors continue to reject restructuring proposals, according to strategists at Barclays.

Argentina came a step closer to regaining capital markets access this week with the announcement of a first settlement with holders of its default debt. Analysts warned, however, that a rapid resolution to negotiations with the remaining holdouts is unlikely.

Progress has been made in negotiations between the Argentinian government and US holdout creditors, court-appointed mediator Daniel Pollack said late Wednesday.

Argentina’s government reopened negotiations with holdout creditors on Monday after securing a $5bn loan from seven global banks last week.

Reports on Friday that the Argentine government would begin negotiations with holdout bond investors on Wednesday sparked buying in the nation’s bonds as the sovereign — rated Caa1/CCC+/CCC rated and still in default — proves an unlikely beacon of stability in Latin America.

Argentine sovereign bonds hit highs for the year on Monday after the US court-appointed mediator in the holdout dispute said that the country’s secretary of finance and vice-chief of cabinet would return to New York to negotiate with bond investors in the second week of January.

MTN investors are speculating that the huge yield available on Argentine peso bonds may be worth the risk of buying bonds denominated in a currency which is undergoing official devaluation.