Tuesday, April 19, 2016

'It is the largest demand in history for an emerging country'

Cabinet Chief Marcos Peña and Revenue and Finance Minister Alfonso Prat Gay hold a press conference at the Pink House.

Cabinet chief Marcos Peña and Revenue and Finance Minister Alfonso Prat Gay today held a conference to address the results of the massive debt issue that was announced on Monday, reaching more than US$65 billion in orders for Argentina’s first international bond in 15 years.

“The priority of this administration is the creation of decent jobs; (…) it was not possible to grow, to develop with our back facing the world. There has been a decision by the President (Mauricio Macri) to get connected back with the world, as it was seen in recent high-level visits like (Barack)Obama’s, our attendance to international forums,” Prat Gay pointed out.

“We are convincing those who are outside (the country), and also those inside, that Argentina is beginning a new stage,” the minister affirmed adding the offers the government received yesterday accounted for “more than 60 billion dollars,” altough he explained the official figures will be released today at 2 pm.

“It is possibly among the greatest (demands) in history. For a country that is still in default, it is impressive that we have moved so quickly from darkness to the possibility of getting connected with the world again,” Prat Gay said.

“We are resolving three issues at the same time: the 2001 default, the default of the previous government (…) and we are returning to the market, with resources that this issuing will provide for the infrastructure plan (…), to create more jobs and finance the deficit.”

Calling the transaction "tremendously successful," Prat Gay said the government received more than $60 billion in bids, about 22 percent of which he planned to accept, for the newly minted sovereign paper.

"This is the biggest demand ever seen for a bond or stock offered by an emerging market government or company, and probably one of the 20 biggest in the world generally," Prat-Gay told a news conference in the Pink House.

The transaction was engineered to pay off hedge funds that had sued the country over its defaulted bonds. Once the funds are paid, borrowing costs for provincial governments and Argentine companies are expected to drop.

The funds sued in the US courts for full repayment of the defaulted Argentine bonds they still hold.

Macri, inaugurated in December, lifted Fernandez's economic controls, prompting a 50 percent devaluation of the Argentine peso, and reached a deal with the funds.