Argentina has picked BBVA, Citi, Deutsche Bank, HSBC, JPMorgan and Santander to lead an upcoming bond sale for as much as $5bn.
The sovereign is planning to hold meetings with investors next week, a debt capital markets source said.
Bond sales by Argentina’s federal and provincial governments and Argentine companies are expected to lead the way in primary issuance levels in Latin America this year, with up to $35bn in bond sales expected.
Anthony Simond, an investment manager at Aberdeen Asset Management, told LatinFinance the sovereign is looking to tap bond markets ahead of Donald Trump’s inauguration on January 20.
A second fixed-income investor raised questions about the amount of debt Argentina has issued over the last year. “They have a low foreign debt-to-GDP ratio of about 34%, but investors are starting to feel the sovereign is relying too heavily on foreign creditors,” the investor said.
After returning to the international bond markets last April, the sovereign found room for a $16.5bn trade across four tranches. Argentina issued a 6.25% $2.75bn 2019 tranche, a 6.875% $4.5bn five-year note, 7.5% $6.5bn 2026 tranche, and a 30-year 7.625% $2.75bn note.
Yields on the notes were hovering in the low-to-high 7% area on Wednesday, according to a second banker.
Another bond buyer expressed concerns the government could threaten to crowd out the market for the country’s corporates.
Renewables developer Genneia is poised to be the first Argentine issuer for 2017, Peter Wietrak,an emerging markets credit analyst at Invesco said yesterday. The natural gas distributor hired Bank of America-Merrill Lynch, Itau BBA and JPMorgan to conduct investor meetings for a potential debut 144A/Reg S cross-border bond sale.