In April, Argentina completed the largest emerging market debt sale on record, ending its decades-long status as a financial pariah with a whopping $16.5 billion global bond offering.
The deal also brought a close to the default era in Argentina.
Now President Mauricio Macri hopes the country’s return to capital markets will unleash a wave of foreign investment and a pipeline of transaction by domestic companies, who can use the sovereign’s debt as a benchmark for their own bond prices.
The timing is crucial. Argentina’s economy is forecast to contract 1% this year, according to the IMF. Inflation is running around 35% and Argentina’s biggest trading partner, Brazil, is mired in a deep recession.
The government also hopes the bond sale will help fund public works programs to help reinvigorate the economy.
Argentine companies are now betting the regained access to financial markets will put them on path for growth. With the sovereign back in the debt capital markets, a slate of Argentine companies are expected to follow suit, and some have already moved quickly.
The hopes for a potential economic turnaround are also helping to improve business confidence, stirring interest in potential mergers and acquisitions deals, which for years were largely nonexistent.
After being locked out of markets for over a decade, many Argentine companies are looking for capital and inorganic growth, as investors look to get a foothold in the country.
LatinFinance takes a look at how some Argentine companies are readying to return to the financial markets and the prospects for M&A dealmaking in Argentina in the months ahead. LF