Banks

RBS share drop accelerates on stress test flop

Stressed. Shares in Royal Bank of Scotland have accelerated their losses this morning, falling over 4.5 per cent after the state-backed lender came in bottom of the heap in the Bank of England’s latest stress tests. RBS failed the toughest ever stress tests carried out by the BoE, with results this morning showing the lender’s […]

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Capital Markets, Financial

BGC Partners eyes new platform to trade US Treasuries

BGC Partners plans to launch a new platform to trade US Treasuries early next year, in a bid to return to a market in the middle of evolution, according to people familiar with the plans.  The company, spun out of Howard Lutnick’s Cantor Fitzgerald in 2004, sold eSpeed, the second-largest interdealer platform for trading Treasuries, […]

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Financial

Sales in Rocket Internet’s portfolio companies rise 30%

Revenues at Rocket Internet rose strongly at its portfolio companies in the first nine months of the year as the German tech group said it was making strides on the “path towards profitability”. Sales at its main companies increased 30.6 per cent to €1.58bn while losses narrowed. Rocket said the adjusted margin for earnings before […]

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Currencies

Renminbi strengthens further despite gains by dollar

The renminbi on track for a fourth day of firming against the dollar on Wednesday after China’s central bank once again pushed the currency’s trading band (marginally) stronger. The onshore exchange rate (CNY) for the reniminbi was 0.28 per cent stronger at Rmb6.8855 in afternoon trade, bringing it 0.53 per cent firmer since it last […]

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Currencies

Nomura rounds up markets’ biggest misses in 2016

Forecasting markets a year in advance is never easy, but with “year-ahead investment themes” season well underway, Nomura has provided a handy reminder of quite how difficult it is, with an overview of markets’ biggest hits and misses (OK, mostly misses) from the start of 2016. The biggest miss among analysts, according to Nomura’s Sam […]

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Categorized | Capital Markets

Argentina plans euro-denominated issue


Posted on September 22, 2016

Argentine President Mauricio Macri gestures at the end of the last session of the Argentina Business and Investment Forum in Buenos Aires, Argentina, on September 15, 2016. / AFP PHOTO / EITAN ABRAMOVICHEITAN ABRAMOVICH/AFP/Getty Images©AFP

Mauricio Macri

Argentina is planning to sell its first euro-denominated bond in more than a decade as the reformist government of president Mauricio Macri takes advantage of low borrowing costs and investors scramble for richer yields.

The government has hired BBVA, BNP Paribas and Credit Suisse to help market the debt on a roadshow that begins next week and will visit London, Germany, Paris, Amsterdam and Milan.

    Efforts to tap the eurobond market come almost six months after Argentina sold a $16.5bn dollar bond, the largest ever issue from a developing economy and a stunning return to the international debt market for the Latin American country after a 15-year exile.

    “There is definitely the argument that where rates are in Europe, investors in Europe who traditionally would not have looked at LatAm . . . are now more or less forced to,” said a banker familiar with the deal.

    The maturity and possible pricing of the debt have yet to be decided. April’s dollar bond, which came at several maturities, followed an agreed $4.65bn cash payment for “holdout” creditors, including Elliott Management, who refused to restructure debt after the 2001 default.

    The 10-year portion of the deal was priced to yield 7.5 per cent, down from 8 per cent thanks to robust investor demand.

    Argentina will join Chile, Colombia and Peru which have all recently tapped the euro sovereign bond market. Record-low interest rates have enticed borrowers, and forced investors to look further afield as part of an increasingly difficult search for yield.

    Emerging market investors say Argentina’s bond is likely to prove attractive given the yields available in developed economies, where low rates or, in the case of the Eurozone and Japan, negative benchmark rates, have driven yields to record low levels.

    “I would argue that you are much better off in an Argentine bond trading 400-500 basis points over (US treasuries) than an Italian bond,” said Jan Dehn, head of research at Ashmore, an emerging markets investment house. “Argentina has done more reforms in the past six months than they have in the past 15 years,” he added.

    The election Mr Macri at the end of last year has improved investor sentiment towards Argentina. In December, he lifted capital controls in a sign of a pro-market shift in the country’s policies. One concern is the future supply of Argentine debt, which has been low over the past decade but now stands to increase steadily.

    “The profile of Argentine debt is very benign — what you’re going to get in Argentina is constant supply. If you keep providing supply, eventually prices go down,” said Mr Dehn.

    Argentina’s sovereign debt is rated B3/B- by rating agencies Moody’s and S&P.