| Province of Buenos Aires fact box Governor: Felipe Solá |
The Province of Buenos Aires has returned to the international capital markets. The question is: will the province’s bond deal pave the way for the sovereign’s return, or is it just out of necessity as the federal government becomes more tight-fisted in its distribution of funds? The PBA issued $475million of 12-year government bonds on October 25 at a yield of 9.75 %, which immediately tightened to 9.57% in the secondary market. The notes sold with a coupon of 9.375% and were priced at 97.417 at a spread of 492 basis points over US treasuries. It is expected that the province will return to the markets again next year.
“The Argentine provinces are becoming the sovereign’s window to the international capital markets,” says Walter Molano, head of research at BCP Securities. Hernan Lorenzino, the under-secretary of finance for the Province of Buenos Aires, agrees “This issue is important for the federal government because it illustrates the investor environment in terms of Argentine debt,” he says.