Argentina, South America's third largest economy, has announced a multi-tranche bond sale worth between $10bn and $15bn (£10.5bn) as it looks to put to bed a long-running battle with investors following its $100bn default in 2001.
It will be the country's first new bond in 15 years. President Mauricio Macri, who took office in December last year, has moved to settle claims with holdout investors led by US hedge funds Elliott Management and Aurelius Capital.
Argentina has since reached agreements with roughly 90 per cent of investors according to Bank of America, most of which were agreed in February.
Initial pricing is thought to be around the 6.75 per cent area on a three-year tranche and eight per cent on a 10-year tranche. A five-year bond will likely yield around 7.5 per cent and a 30-year bond yielding 8.85 per cent are also thought to be available, though pricing will be confirmed tomorrow.
It's been reported that the bond sale was oversubscribed, and was heard to have garnered indications of interest of around $25bn.
Last week ratings agency Moody’s upgraded Argentina’s credit rating, citing an improvement in economic policy and the possibility of settling with holdout creditors.
The new B3 rating does still leave the country languishing in junk territory however, but was seen as supportive.
Argentina was locked out of international capital markets following its default and was repeatedly forced to print money to meet costs, sending inflation soaring.
The payments to its creditors mean the US will lift injunctions against the country that were put in place following its defaults.
US District Judge Thomas Griesa will lift the injunctions against the country, said court-appointed mediator Daniel Pollack:
That certification could come as early as Thursday or Friday of [this] week, depending on when Argentina does its capital-raise needed to make the agreed payments. Argentina will be freed of the injunctions that have kept it isolated from the global financial markets for years.
The holdout creditors, who are expected to pocket around 75 per cent of what they demanded in the new agreement, will get a first look in at the proceeds.
Deutsche Bank, HSBC, JP Morgan and Santander are acting as global coordinators on the bond sale, while BBVA, Citigroup and UBS are joint bookrunners.