Argentina is on the cusp of one of the most anticipated comebacks in recent history, as the Latin American country ends a 15-year exile from the international debt market with a multibillion-dollar sale.
Early reports suggest Argentina’s plan to sell up to $15bn of government bonds has been oversubscribed, with 10-year bonds in particular demand.
Initial pricing puts the yield on new 10-year debt at 8 per cent, with shorter dated three and five-year bonds yielding 6.75 per cent and 7.5 per cent respectively.
Its 30-year bond is slated to yield 8.85 per cent.
Argentina may hold some lessons for Nigeria, which today could probably not issue dollar bonds of any size or tenor below a 10 percent asking yield from investors.
The election of President Mauricio Macri’s market-friendly government at the end of last year has ignited renewed investor interest in Latin America’s third-largest economy.
Macri got rid of Argentina’s capital controls and freed the currency to find its market determined level.
Nigeria continues to do the opposite which is naturally chasing investors out of the country and ensuring that no new flows come in.
The country has also been reduced to begging cap in hand for Chinese loans and Swap agreements with dubious benefits as the Finance Minister scraps a previously planned Eurobond roadshow because investors were certain to ask tough questions on Nigeria’s crazy and misguided FX policy.
On Friday, global rating agency Moody’s upgraded Argentina’s credit rating noting the economic policy improvements and possible settlement with holdout creditors.
By comparison Major rating agencies (Standard and Poor’s and Fitch) have put Nigeria on notice for a potential downgrade in a few months.