March 28, 2018 / 1:11 PM / a year ago

Argentina to sell $4.2 bln bond as part of provincial fiscal pact

BUENOS AIRES, March 28 (Reuters) - Argentina said on Wednesday it plans to issue $4.2 billion in peso-denominated bonds at an interest rate of 6.73 percent as part of a fiscal pact signed late last year aimed at bolstering the financial position of the country’s provinces.

The debt is scheduled to be issued April 3 and will offer 125 monthly payments through the end of 2028, according to the government’s official gazette. Proceeds will be distributed among most of Argentina’s provinces.

Under the fiscal pact, signed soon after President Mauricio Macri’s coalition turned in a stronger-than-expected showing in October congressional elections, nearly all of Argentina’s 24 provinces agreed not to hike spending above the inflation rate and to lower some taxes.

To get the money, provinces agreed to drop pending litigation against the national government for underpayment of fiscal resources owed under Argentina’s co-participation rules.

The bonds issued on April 3 will not be traded in the secondary market, according to the announcement in the gazette. (Reporting by Walter Bianchi; writing by Hugh Bronstein Editing by Jeffrey Benkoe)

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