Argentina “Successfully” Rolls Debt – Sells 5-Year Note At Massive 20% Yield

So there’s success and there’s ‘success’ and while Argentine officials are proclaiming victory in managing to roll its best, saying it “couldn’t have got a bigger vote of confidence,” the fact that it could only sell the new bonds at 20% yields is perhaps the more important fact…

The BCRA desperately supported the peso today ahead of the auctions…

And still they could only fill their order book by paying an economy-crushing 19% (8Y) and 20% (5Y) BOTEs

Finance Minister Luis Caputo tells reporters in Buenos Aires:

  • Govt sold about 36.9b pesos of 2023 BOTEs at 20%
  • Govt sold about 36.4b pesos of 2026 BOTEs at 19%

Caputo added that the Lebac auction was held without any issues, confidently noting that “Argentina sold this debt on the most difficult day for EM in 2018,” adding that “Argentina couldn’t have gotten a bigger shot of confidence in its economy today.”

Additionally, Bloomberg reports that the BCRA press office confirms that it covered more than 100% of the expiring Lebacs – with bods for 621 billion pesos at a 1-month yield of 40%!

For now, the peso market is shut but MSCI Argentina ETF is up around 3% after hours…

Caputo then reiterated that Argentina may not need to sell debt abroad in 2019 because of the financing that the nation is seeking with the IMF, and reiterated it won’t sell international debt this year. Caputo concluded optimistically saying that “volatility is to ease now in Argentina.”

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