Argentina

Argentine lender Banco Hipotecario and Colombian utility EPM sold local currency deals on the international market this week but market participants said a limited buyer base is restricting momentum in these types of trades.

Argentina this week jumped on momentum driven by the government’s impressive recent election performance to attract €11.5bn of orders for a triple tranche euro denominated bond — including a 30 year note that is rarely seen in the currency from EM borrowers. Oliver West reports.

Argentina has released price guidance for a €2.5bn triple tranche bond at levels a trader in London described as shockingly wide, while investors started to fret about how much debt the country takes on.

Argentine lender Banco Hipotecario returned to the international markets with a peso-linked deal on Wednesday, becoming the fourth Latin American issuer to sell global local currency bonds in two weeks.

Latin America’s most prolific issuer of the last two years is hoping to make its expected return to the euro-denominated bond market on Thursday.

Argentine stocks and bonds enjoyed a strong week after President Mauricio Macri’s Cambiemos coalition’s impressive showing in mid-term elections on October 22, and one issuer has wasted no time in jumping on the improving sentiment.

Lender Banco Hipotecario, which was the first Argentine borrower in cross-border markets after Mauricio Macri’s presidential election win in November 2015, could also be the first to issue after the president’s successful showing in mid-terms last Sunday.

Argentine bonds and stocks rallied strongly on Monday after the ruling Cambiemos coalition bettered the predictions of already favourable opinion polls at Sunday’s mid-term elections.

Luis Caputo, the finance minister of Argentina, said on Wednesday that the South American sovereign would likely return to the euro-denominated bond market in late October or early November.

Argentine finance minister Luis Caputo said that Argentina would issue two further international bonds in 2017 although it will likely avoid the dollar market, where it has raised over $9.5bn of funding so far this year.

A strong aftermarket performance by the latest debut international bond from an Argentine province should encourage more local governments to follow suit.

Argentina’s most north-western province raised $210m of green bonds due in 2022 on Wednesday, as bankers say activity is ready to recommence in earnest.