Argentina reissues government bond

On Wednesday, Argentina will issue a new government bond after a three and a half year absence from the debt market. This new issue, worth only 1 billion pesos, has practical as well as psychological reasons.

The decision to return to the market now was made despite continuing litigation in New York involving the nation and a small group of investors which has rejected the $100 billion restructuring of its debt offered by Argentina in February. In practical terms, the bond issue will bring in around $370 million to the Argentine government.

This week it paid out that amount exactly on a series of Boden bonds that had come due. In psychological terms, the issue is seen as a way of getting back to normal after the absence from the market after Argentina’s financial collapse. It is also seen as a way for Argentina to test the waters of the bond market.

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