November Launch For Bono Del Sur

Venezuela and Argentina will launch the first tranche of their so-called “Bono del Sur” in the first two weeks of November, according to Venezuela’s finance minister Nelson Merentes. The two countries will issue jointly $1 billion, in Venezuela to avoid any possible claims or embargoes by Argentina’s holdout creditors. The bond will be the first of its kind and will comprise government debt securities from both sovereigns: one of Argentina’s dollar-denominated Boden bonds (2012 or 2015) and a 15-year TIF (título de interés fijo) from Venezuela. Investors will pay a yield based on the combined country risk of both issuers, which, according to JP Morgan’s EMBI+ Tuesday stood at 293 basis points and 218 basis points for Argentina and Venezuela, respectively. According to Merentes, the two nations will issue a further $1 billion before the end of the year and follow up with tranches next year of up to $3 billion.