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Argentina is negotiating a $2bn loan with private banks to refinance upcoming debt maturities. The loan will be backed by World Bank institutions like the IBRD and the Multilateral Investment Guarantee Agency which may help secure lower rates. The Economy Minister Luis Caputo, is said to be in talks for the six-year facility, which includes a three-year grace period. The proposed interest rate is about 5%, a significantly cheaper alternative to global capital markets, where Argentina’s bond yields currently exceed 9%. Caputo has signaled that this financing would eliminate the need for Argentina to tap international markets for the remainder of the year. This new funding would complement Argentina’s existing $20bn IMF program and a separate $20bn currency swap line with the US Treasury. Analysts note that securing the loan would be viewed as a bridge toward an eventual return to global markets once sovereign risk premiums reduce. This comes after the nation reached an IMF staff-level deal unlocking potential access to $1bn in fresh funding.
Argentina’s dollar bonds were trading stable, with its 4.125% 2035s at 76.1, yielding 8.8%.
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