Argentina Corporate Debt: Reapertura?

Sep 1, 2010

Fresh borrowing by Argentine corporates and sub-sovereigns dovetails with hopes of the sovereign regaining access. A corporate debt boom is unlikely.

by Ben Miller

Argentine entities are back on the credit map with a whimper, not a bang. The sovereign limped closer to access by closing a $12.1 billion exchange with holdout investors in June, but provinces are already issuing without its support.

"We were ready to issue even last year," Víctor Cisterna, economy minister of Argentina’s Chubut province says of the $150 million bond the government sold in July, backed by oil royalties. "I don’t think the federal government exchange helped us, nor did it hurt us."

Getting a majority of holdouts to agree to Argentina’s stingy swap terms was meant to end a decade of isolation from international borrowing and boost access for corporates and sub-sovereigns. It could one day revive the government’s access to international bond markets, setting valuable benchmarks for corporates and sub-sovereigns. But the government wants better pricing and is...

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