Argentina taps the local market to fund a $4.2 billion bondholder payment due July 9

Argentina's Economy Ministry on Monday completed the placement of the Bonar 2028 (AO28), a dollar-denominated bond under local law, raising most of the funds needed to face a maturity of around $4.2 billion with private debt holders due on July 9. In the second round of the auction, the Finance Secretariat awarded $100 million, thereby reaching the authorized cap of $2 billion for that instrument.

The operation added to the $266 million placed the previous Friday. According to official data, the ministry received offers worth some $668 million and agreed on a nominal annual rate of 7.56% and an effective rate of 7.83%. The funds will be transferred to the Treasury's account at the Central Bank and used for next week's payment to bondholders.

The strategy of Economy Minister Luis Caputo was aimed at obtaining foreign currency in the local market rather than turning to international credit markets, where rates for Argentina remain high. The Bonar 2028, along with the Bonar 2027, has in recent weeks become one of the Treasury's main tools for strengthening its position ahead of foreign-currency commitments. Market analysts read the reduction in the rate from previous placements —which two weeks earlier had exceeded 8%— as a sign of greater confidence in the country's ability to pay, though they warned that the government will have to keep carefully managing rates, the maturity schedule and exchange-rate expectations in the second half of the year.