BUENOS AIRES (Reuters) - Argentina clinched an 18-month financing deal worth $6 billion with six banks on Thursday, Finance Minister Luis Caputo told reporters, saying the government planned to tap international capital markets for $10 billion in 2017.
Sovereign bond issuance will start on Jan. 19, with a sale of $3 billion to $5 billion in U.S. dollar-denominated paper.
The sale will kick off an international financing program under which Argentina expects to sell $7 billion of dollar bonds and $3 billion of bonds in other currencies, Caputo told a news conference. He did not discuss specifics about bond maturities or interest rates.
The deal with the banks along with nearly $4 billion in planned multilateral borrowing from institutions including the World Bank and Inter-American Development Bank should reduce Argentina’s need to tap international capital markets.
“It’s very positive news for us,” Caputo said of the bank financing agreement, which he added would be backed by the country’s Bonar 24 bonds. The repo deal was priced at three month Libor plus 290 basis points.
The six banks chosen for the repo deal and dollar bond sale were Santander (SAN.MC), BBVA (BBVA.MC), Citibank (C.N), Deutsche Bank (DBKGn.DE), HSBC (HSBA.L) and JP Morgan (JPM.N), Thomson Reuters International Financing Review reported.
Caputo said Argentina also planned on Jan. 19 to sell $1 billion to $2 billion equivalent of peso-denominated ARS=RASL debt under local law, under a program in which the government plans in 2017 to issue $14 billion equivalent of peso-denominated obligations.
Reporting by Luc Cohen; Editing by Lisa Shumaker and Peter Cooney