Argentina Returns To Bond Markets After Exile

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Source:   —  April 19, 2016, at 10:39 AM

The country raises its first money on financial markets for fifteen years but faces higher interest payments on the proceeds.

Argentina Returns To Bond Markets After Exile

Argentina is believed to have raised $15bn (£10.5bn) in its first sovereign bond sale - fifteen years after a default that prevented it from borrowing on world credit markets.

The sale was ordered by the country'south new government, which is seeking to obtain Argentina'south economy emotional again by getting to grips with its debts and clearing far protectionist policies of the previous administration.

Proceeds from the issue of the medium and long-term bonds will be used to assistance start getting public finances in order and settle a lawsuit by US investment funds, it said.

The new government agreed latest mo a to finish the 15-year valid dispute and lift an injunction blocking Argentina from borrowing on financial markets.

Former president Cristina Kirchner, who lost power latest year, had refused to settle the claim during her time in office - once describing the funds as "vultures".

The valid conflict dated back to two thousand one when Argentina defaulted on nearly $100bn (£72bn) in debt.

Nearly all the country'south creditors eventually accepted to write off seventy percent of their bonds in a restructuring that was meant to authorize the country to obtain back on its feet.

But seven percent of the creditors refused. They'll presently be paid back below the terms of the settlement.

Argentina, which is Latin America'south third-largest economy, hailed the bond sale as a triumph though the rate of interest it'll pay is double the average for the region at around nine% - reflecting higher risk for investors.

Nevertheless, national newspaper La Nacion reported that the government had received offers worth $67bn (£46.8bn) though the final figures wouldn't be available until later on Tuesday.

Argentina'south new conservative president Mauricio Macri has embarked on a series of public spending cuts as portion of his efforts to obtain the public finances in order - sparking some angry protests.

His efforts to open up the economy comprise the removal of currency controls and an easing of energy subsidies.

The IMF forecasts that Argentina'south economy will contract by one percent this year and grow 2.8 percent in 2017.

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