Caputo seeks USD 1,000 million with a bond exclusively for foreigners

The national government will carry out an unprecedented debt issuance this Tuesday: a peso-denominated bond aimed exclusively at foreign investors, which can only be subscribed in dollars. The main objective of the operation is to strengthen the reserves of the Central Bank (BCRA) in light of the upcoming debt commitments in July, when approximately USD 4.5 billion will need to be disbursed for principal and interest maturities.

According to official sources, the chosen instrument is the Bonte 2030, a local currency security that aims to bring in foreign currency through the capital account. If the operation is completed, an estimated inflow of USD 1 billion is expected to strengthen the BCRA's coffers.

A strategy to add dollars without buying in the market

For weeks, the economic team led by Luis “Toto” Caputo had indicated that reserve accumulation would not be achieved through market purchases, unless the official dollar reached the lower limit of the exchange rate band. However, with a current rate close to $1,170, far from the estimated $1,000, that scenario has not yet materialized.

"Caputo's bet is that dollar accumulation will occur through inflows via the capital account," sources from the Ministry of Economy told Infobae. In this regard, other alternatives are not ruled out, such as new corporate bonds abroad or the reactivation of a repo with international banks, that is, a loan backed by bonds, like the one closed in February.

The market reacts: bonds rise and the rate is debated

The news was well received by the markets. Sovereign bonds in dollars rose up to 1.5%, especially those with longer maturities, reflecting improved perceptions of the country's ability to meet its commitments. "The more reserves the government accumulates, the higher the probability of payment," financial analysts point out.

Meanwhile, traders and market agents (Alycs) were multiplying calculations about what rate will be set today. According to surveys, the expected yield ranges between 20% and 25% per year in pesos, significantly below LECAPs, which currently yield more than 40%.

The reason for this lower rate is the expectation of a sharp decline in inflation in the medium term. According to the Central Bank's Market Expectations Survey (REM), by the end of 2026 inflation could be below 10% per year. In this context, interest rates would tend to adjust downward, in line with greater exchange rate stability.

A key auction to gauge external support

The result of this issuance will be a litmus test to measure international support for the government's economic direction. If the rate obtained is below 20% per year, it will be interpreted as a strong vote of confidence. On the other hand, if it exceeds 25%, the market will be showing a more cautious, though still positive, stance.

"The real objective is to reduce country risk to a level that allows for issuing debt in dollars at reasonable rates," sources close to Caputo state. Currently, with a country risk of 650 basis points, issuing bonds in foreign currency would mean paying rates above 11% per year.