Republic of Argentina

Argentina’s four-tranche
$16.5 billion bond trade in April re-introduced the country to fixed income
investors. With three-year, five-year, 10-year and 30-year tranches, Argentina ended a 15-year dispute with creditors that had kept the country isolated from the capital markets. 

In the process, the sovereign attracted the largest order book ever for an emerging market bond deal. With almost $70 billion in
commitments for a transaction that boldly heralded the country’s return to external financing channels, Argentina wins LatinFinance’s
Sovereign Bond of the Year.

Global coordinators Deutsche Bank, HSBC, JPMorgan and
Santander, along with joint bookrunners BBVA, Citi and UBS priced a $2.75
billion 2019 tranche, a $4.5 billion 2021, a $6.5 billion 10-year and a $2.75 billion 2046. The 2026 bond proved the most popular, bringing
in $25.7 billion in orders, enabling the leads to tighten the yield to 7.5%.

Overall, the banks took around 2,000 individual orders. The deal saved Argentina about $3 billion
in repayments on top of another $6 billion saved in its
agreement with holdout creditors, Finance Minister Alfonso Prat-Gay announced at the time.

After a strong rally in its debt, the sovereign returned two months later to issue an additional $2.75
billion across 12- and 20-year tranches. The tightening in its other instruments coupled with strong demand — the book reached $8 billion — allowed the borrower to sell the new 12-year bond at a yield 87.5 basis points lower than it had offered on its 10-year just two months earlier.

In October the B3/B-/B rated Argentina rounded out its year in the
cross-border bond market with a euro-denominated issue. Bookrunners BBVA,
BNP Paribas and Credit Suisse took about €7.5 billion ($7.9 billion) in orders,
before printing €2.5 billion in 2022 and 2027 paper.

After a 15-year lockout, Argentina in less than 12 months reestablished a relationship with bond investors around the world. Returning with such vigor, the sovereign opened the way
for domestic provinces and companies to also issue debt. In raising $19.25
billion worth of new bonds and settling long-standing disputes with
creditors, Argentina is LatinFinance’s Sovereign
Issuer of the Year. LF

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Size: $16.5bn

Date: April 2016

Supporting banks: Deutsche Bank, HSBC, JPMorgan, Santander, BBVA, Citi, UBS, BNY Mellon

Supporting law firms: Bruchou, Fernández Madero & Lombardi, Cleary Gottlieb, Errecondo, González & Funes Abogados, Shearman & Sterling

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