Foreigners Load up on Argentine Risk, Locals Shy Away

Foreign investors just can’t get enough of Argentine corporate risk, panelists at LatinFinance’s fourth Cumbre Financiera Argentina in Buenos Aires said yesterday, as an offshore market in fixed rate five year peso bonds flourishes. Ronaldo Strazzolini, head of corporate finance at Citi, says Argentine blue chips can expect to raise 10-year bullet financing in the high yield US market and tap a growing peso offshore market for Argentine companies for five-year fixed rate money. Gabriel Blasi, CFO of Grupo Irsa, notes that Argentine political risk ranked low on the list of investor concerns on roadshows for issues in February and May. By contrast, local investors have scant appetite for Argentine assets in the real estate and agribusiness sectors, he says, and their appetite for equity is even more anemic. Blasi predicts that more Argentine companies will beat a path to Brazil’s Bovespa to raise equity capital as Argentina’s equity market continues to wither. A clear regulatory framework, deep secondary market liquidity and decent valuations make listing in Brazil more attractive. Irsa listed its subsidiary on the Bovespa to expand agribusiness into that country. Banco Patagonia is said to be preparing to list shares on the Bovespa, in coming weeks with JPMorgan advising.