July 30, 2014 / 12:50 PM / in 3 years

Argentina bonds rally on optimism over holdout talks

NEW YORK, July 30 (IFR) - Argentina’s international and local bonds traded up sharply on Wednesday as last-minute negotiations between the sovereign and holdout creditors fueled optimism that an agreement to avert a default will be reached.

The country’s Discount 2033 notes traded up by as much as 8 points to a bid price of 92.25, while the Par 2038s rose by around 4 points to a bid price of 51.75, said traders.

Argentina’s five-year credit default swaps were quoted 320bp tighter on the day at a spread of 1574bp, while the US dollar-denominated local-law Boden 2015s were up by 5 points at 101 mid-market.

Economy minister Kicillof’s arrival at the talks late Tuesday evening was hailed as a positive sign that negotiations are headed in the right direction.

“That’s good news, because if there is going to be an agreement, he is the one who is going to be there,” said one trader. “He made the last two agreements with the Paris Club and Repsol.” (Reporting by Davide Scigliuzzo; Editing by Paul Kilby)

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