Category: Argentina

The Bank of America in Argentina has finalized the sale of BankBoston to a consortium led by South Africa’s Standard Bank and local families Werthein and Sielecki in a 70:20:10 split. The deal is rumored to be worth between $160 million and $180 million.

Argentina’s GDP grew by 9.3% year on year in October, taking economic expansion for the first 10 months of the year to 9.2%. Annual growth of 8.5% is expected this year. The government gave no details of the growth drivers for the month.

Argentina has sold an additional $495.7 million of its US dollar-denominated Boden 2012 to Venezuela. This takes the amount of Argentine sovereign debt bought this year by Venezuela to over $1 billion.

Argentina is reportedly planning to tap the international markets for $8.9 billion, which it will then transfer to the central bank to replace funds used to pay off the sovereign’s debt with the IMF. The bonds are likely have 10 to 15-year maturities although it is not clear if they are to be issued in local currency or US dollars. The government is yet to confirm officially that the issuance will take place.

Argentina’s industrial production rose 8.9% year on year in November, driven by the automotive and non-metallic mining sectors. Month on month industrial output rose 0.4% in November, compared with October.

The Province of Buenos Aires, Argentina’s richest province, said that its $2.9 billion debt swap that closed on Friday has seen 93% take-up by investors. Buenos Aires offered to exchange 30% or $3.1 billion of its total $9 billion defaulted bonds with maturities from 2002 to 2007 for three kinds of bonds, denominated in dollars or euros, with longer maturities carrying lower interest rates. The province’s debt swap was the largest such deal since the Republic of Argentina’s in June this year. The global coordinator of the swap was Citigroup Global Markets Inc.

Argentina’s currency and markets slumped on Friday following the news late Thursday that the country’s intends to clear all of its debt with the International Monetary Fund (IMF). The peso closed at the year’s weakest level of 3.0355 pesos against the dollar, reflecting investor fears that government spending may rocket and inflation may slip out of control. Argentina’s President Néstor Kirchner said he wanted to clear the $9.8 billion debt so that the country could get on with its economic management without external pressure. In declaring its economic independence from the IMF, Argentina will have to dig into its foreign reserves to settle the debt but Kirchner says the early repayment will save $1 billion in interest. Argentina’s decision came a few days after Brazil’s announcement that it would be repaying its $15.5 billion debt to the IMF two years ahead of schedule. However, unlike with Brazil, investors have reacted nervously to Argentina’s intended move and Kirchner has faced internal criticism.

Boston-based money manager firm Granthan Mayo Van Otterloo (GMO) is suing the Republic of Argentina for a minimum of $236 million in principal and interest it claims to have lost in the sovereign’s debt default in 2001/2. GMO is part of the 24% of creditors who refused to enter into a debt swap deal offered earlier this year by Argentina.

Japanese manufacturer Honda Motor Co plans to start producing motorcycles in Argentina from the middle of next year. Honda will invest $1 million in a facility based in the province of Buenos Aires to produce the C105 Biz model. The Japanese company is currently Argentina’s market leader in motorcycle sales, with a 22% market share.

The 2010 dollar-denominated notes of Argentina’s Telecom Personal have been rated B- by Standard & Poor’s. The 144A securities of up to $300 million are being issued to help finance part of the company’s existing debt. Telecom Personal is owned by Telecom Argentina SA and the rating reflects the close link of Personal’s credit quality with that of its parent company.