Argentina changed dramatically in 2024, with the macroeconomy beginning to stabilize after years of turbulence.
President Javier Milei, an economist inaugurated in December 2023, and his team have brought down inflation and the economy has started to show signs of recovery. The economy expanded in the third quarter compared to the previous quarter and October was the ninth consecutive month with a fiscal surplus.
The situation remains tough, though, with the Organization for Economic Cooperation and Development (OECD) estimating that the economy will have contracted by 3.8% in 2024. It estimates a rebound to 3.6% in 2025.
Optimism is returning with the hope that investment, taking advantage of an incentives program and reduced bureaucracy, will follow.
“We are optimistic. The country is starting to grow and we are seeing a great deal of interest. The million dollar question is when will investors believe that the change in Argentina is sustainable,” says Alexia Rosenthal, a partner at Argentina’s TCA Tanoira Cassagne law firm.
Rosenthal and the firm’s nearly 80 attorneys have reason to be optimistic, with TCA clearly benefitting from renewed interest in Argentina. It was the top law firm in the country in terms of volume of transactions in the first three quarters of 2024 and had a hand in a number of landmark deals.
“We have been very active this year with transactions in the capital market. Unlike other firms, we do not offer passive advice but a vision with respect to how regulations work and are applied,” said Rosenthal.
TCA, which wins Law Firm of the Year for Argentina for a second consecutive year, worked on the its $800 million bond for YPF, the state-owned oil and gas company, last January. That bond was an early sign of confidence and opened up the market for others to follow. The firm also worked on smaller YPF transactions later in the year.
Ignacio Criado, a TCA partner, says the country’s initial recovery can be seen in three sectors, oil & gas, electricity, particularly renewables, and mining. In addition to YPF, TCA worked on a transaction for Genneia, Argentina’s largest renewable energy company, as well as with mining firms, particularly in lithium. Argentina is the world’s fourth lithium producer and second with lithium resources, home to 22 million tons of the white metal.
The firm worked on the IFC’s groundbreaking $180 million loan to Allkem for its lithium project. It was the first project financing for mining in Argentina’s history. It also advised Minera Exar on the issuance of its Series I Notes for $50 million, another milestone in the country’s capital markets.
Partner Rocio Carrica says the firm is gearing up for major changes in the banking sector. She says banks are starting to act like banks again, offering loans. She expects consolidation: Argentina currently has 62 banks, 49 private and 13 public.
“There are too many banks right now, so we are going to see mergers,” she says.