Argentina’s Cordoba province has sold $105.5 million in a 360-day dollar-denominated bond backed by revenue from a tax-sharing scheme with the federal government. The paper, which carries a coupon of 9.5 percent, was sold on the local market and both the interest and capital will be paid in pesos at the official exchange rate. Deutsche Bank S.A. is serving as the fiduciary.
The country’s provinces face a financing crunch as the economy slows and wage demands are stoked by inflation estimated at between 20 percent and 25 percent a year. Cordoba and Buenos Aires province, the country’s largest, are among the districts that have struggled to pay state employees’ wages and pensions on time. The proceeds of Cordoba’s bond sale were earmarked for public works projects.
Buenos Aires province said it would pay its debts as usual this year despite tight finances. Reuters Messaging: email@example.com