BUENOS AIRES May 30 The province of Buenos
Aires has called off plans to tap international capital markets
because of prohibitive borrowing costs, sources familiar with
the matter said on Friday.
The regional government, which had been readying its first
international bond in three years, may have needed to pay an
interest rate of up to 13.5 percent to lure buyers into the
deal, banks and investors said on Thursday.
The province had been targeting a maximum rate of 12 percent
on a 10-year issue and has called off the issuance until
borrowing costs drop to more palatable levels.
A spokesman for the province's economy ministry declined to
comment on the reports.
Argentina has been virtually shut of out international
capital markets since its 2001/02 default on some $100 billion
A long-running battle with holdout bondholders who rejected
Argentina's debt swap offers, which could push Argentina into a
new technical default, has kept yields for the country and its
provinces in double digit figures.
The U.S. Supreme Court will meet on June 12 to consider
whether to hear the case.
"If things go well with the Supreme Court, we could have a
rally in Argentine bonds," one of the sources said, noting the
province could decide to issue new debt then.
(Reporting by Gabriel Burin and Alejandro Lifschitz; Writing by
Sarah Marsh; Editing by Steve Orlofsky)