The national government will issue a dollar-denominated bond tomorrow, and the proceeds will be used to cover part of the $4.5 billion maturity due in January. This is a new operation in the voluntary debt market after an eight-year hiatus. The bond will be named BONAR 2029N, with a four-year term (until November 2029 during a new presidential term), a semi-annual coupon, a 6.5% rate, and principal payment at maturity. Interested parties must submit their offers from Wednesday at 10 a.m. until 3 p.m. The amount applied to cover this maturity is estimated to be around $1.187 million. The proposed purchase price of the bond determines the final yield, according to a communiqué received by the Argentine News Agency. The primary purpose of this new issuance is to cover dollar debt maturities without affecting the net reserves of the Central Bank of the Argentine Republic (BCRA). By refinancing the principal, the operation facilitates dollar purchases without creating additional price pressures and allows for a net accumulation of reserves. Furthermore, the placement prevents the National Treasury from having to access the local foreign exchange market to buy the necessary dollars, a process that could negatively influence the exchange rate and inflation. The decision to use Argentine legislation is due to the current 'Guzmán Law', which requires any debt issuance under foreign law to be approved by the National Congress. The operation is crucial for Argentina to regain, even partially, access to the capital markets, and it also serves as a response to the International Monetary Fund (IMF), which has requested the government to advance in reserve accumulation. The funds obtained from the auction will be used to partially pay the principal maturity of the AL30 and AL29 bonds, which matures on January 9, 2026.
