Argentina’s New Global Test

Argentina is to launch a new global bond, the Bonar V, the first tranche of which will be offered at Dutch auction on Wednesday. The bond, which matures March 28 2011 carries a coupon of 7%. The government plans to issue $1.5 billion of the bond in total, with this first tranche amounting to $500 million. It will be the sovereign’s first foray into the international market since canceling its global issue last September due to the high yields being demanded by investors. Argentina has since sold only directly to Venezuela and other state agencies. The success of the new five-year dollar bond in the open market will be an indicator of the how investors think Argentina is doing.