(Adds amortizing structure, analyst quote)
By Davide Scigliuzzo
BUENOS AIRES, March 8 (IFR) - The province of Buenos Aires
is poised to issue a new seven-year bond this week with a yield
between 9% and 9.5%, jumping ahead of a jumbo deal awaited from
the Argentine sovereign.
The local government is expected to raise between US$750m
and US$1bn with the bond, which could be announced as soon as
Wednesday, according to market participants.
With Argentina looking to hit the market with a more than
$10bn bond by mid-April in order to pay a settlement with
holdout creditors, officials from the province are moving fast.
"They want to come as soon as possible," said one investor
who met with the provincial government's secretary of finance,
Guido Sandleris, during the roadshow.
The investor told IFR that local officials see an
opportunity to have the market to themselves before the
sovereign and other Argentine issuers rush to sell bonds.
He said the province might opt for an amortizing structure,
in which case the notes would have an average life of a little
less than seven years.
A second investor who met with the delegation said officials
are targeting a yield of between 9% and 9.5% for the seven-year
While a 9% yield would put the new issue roughly flat to the
province's outstanding curve, investors could still benefit from
a future compression in spreads, according to AdCap Securities,
a Miami-based brokerage and investment bank.
"We believe that investors buying the new issuance (at a
yield of around 9%) should benefit from an additional tightening
once the holdout litigation is finally resolved and the
subsequent supply is absorbed," AdCap said in a note on Tuesday.
The province wraps up meetings in Los Angeles and Boston on
Tuesday, after visiting investors in London and New York this
week and last.
Citigroup, HSBC and JP Morgan are the lead managers on the
bond offering, which is expected to be rated Caa2/B-/B-.
(Reporting by Davide Scigliuzzo; Editing by Paul Kilby and Marc