Argentina eyes return to market with planned $11.68 billion debt sale

BUENOS AIRES (Reuters) - Argentina plans to return to international credit markets in April with three bonds sales totaling $11.68 billion under U.S. law if Congress swiftly approves a debt deal for holdout creditors, top finance ministry officials told Congress on Friday.

Argentina's Finance Minister Alfonso Prat-Gay (L) speaks next to Finance Secretary Luis Caputo during a news conference in Buenos Aires, Argentina, February 29, 2016. REUTERS/Marcos Brindicci

Finance Minister Alfonso Prat-Gay said the bonds, which will be used to finance the payouts to investors holding unpaid debt stemming from the country’s 2002 default, would carry maturities of five, ten and thirty years.

Prat-Gay and his deputy, Luis Caputo, on Friday presented a package of debt agreements brokered with creditors, including a $4.65 billion cash payout to the main holdouts suing in a Manhattan court led by billionaire Paul Singer.

Argentina has now reached provisional settlements with about 85 percent of bondholders and says negotiations continue with the rest.

“If the deal extends to all holdout investors, the bond issue will be for $11.684 billion. That’s what we need to close this chapter definitively,” Prat-Gay said.

The debate in Congress is the first major political test of President Mauricio Macri’s ability to garner cross-party support for his economic reform package, the success of which hinges on ending the festering 14-year debt battle.

Legislators will also be asked to repeal two laws blocking settlement of the debt case.

Macri’s government is confident it can corral the votes needed to win approval even though the opposition holds a majority in the Senate and Macri holds only the largest minority in the lower chamber.

Caputo told legislators the bonds would carry an interest rate of about 7.5 percent. While debt brokers see healthy appetite for Argentine debt after its prolonged absence from global debt markets, the gloomy global context may weigh.

Argentina has been a financial markets pariah since its record default on $100 billion in 2002 but progress is being made, according to court-appointed mediator Daniel Pollack.

He said on Friday that agreements in principle had been struck with 10 additional bondholders involving settlements totaling $6.7 million. The deals are subject to Congress lifting the two laws and that the court lift injunctions on bond payments that have been in place for the last several years.

“The court has done so, conditionally, but a few parties have appealed that order,” Pollack said in a statement. “It is the hope of all concerned that the appeals will be expedited so that there can be clarity as to the finality of the order.”

Reporting by Gabriel Burin, Writing by Richard Lough; Editing by Chris Reese