Following the victory of President Javier Milei’s party in the October midterm elections and after the financial backing provided by Donald Trump and Scott Bessent to the South American country, Argentina’s country risk (JP Morgan’s EMBI+ Argentina) plummeted, while financial assets surged. In this context, discussions have begun around the possibility of a sovereign debt issuance in the international market. However, market expectations suggest it won’t happen immediately.
Sources consulted by Funds Society agreed that the country has several issues to resolve before attempting a return to international markets. Attention has turned once again to the foreign currency reserves of the Central Bank of the Argentine Republic (BCRA), while the market awaits concrete progress on the structural reforms promised by the government and seeks clarity on the strategy to address January’s upcoming maturities.
Regarding international investor appetite for a potential new Argentine issuance, one expert noted that caution prevails, as the political landscape in Argentina remains binary. Another added that if the market perceives continuity, and once there is more visibility on pending matters, interest should deepen.
Between Issuances and Defaults
During Mauricio Macri’s administration (2015–2019), Argentina returned to capital markets and issued debt abroad multiple times. A landmark during that period was the issuance of a 100-year dollar-denominated bond in June 2017.
But that was the last major “traditional” international issuance by the South American country. In 2018, a new currency crisis led to an agreement with the International Monetary Fund (IMF), and Argentina lost sustained access to voluntary external markets. In 2020, with the debt restructuring (selective default) and swap led by Alberto Fernández’s administration, the international window for new issuances remained closed.
On May 28 of this year, the government tested a return with an issuance aimed at international investors through the BONTE 2030 instrument (a peso-denominated bond subscribed in U.S. dollars).
Following the latest electoral result, market sentiment shifted. The City of Buenos Aires Government and eight energy companies (Tecpetrol, YPF, Pampa Energía, TGS, Pluspetrol, CGC, Genneia, and Edenor) seized the momentum and launched a wave of international bond issuances totaling 4.201 billion U.S. dollars. The average yield on these issuances was around 8%.
However, when The Wall Street Journal reported that the assistance package of another 20 billion dollars with international banks had been suspended, the market began demanding clarity on how external maturities would be covered and how the reserve accumulation program would continue.
Foreign-currency bond maturities amount to more than 8.4 billion U.S. dollars in 2026. Meanwhile, the Central Bank’s net reserves are only slightly positive. Noise returned—something common in Argentina—and the country risk began to rise once again.
According to the press, Economy Minister Luis “Toto” Caputo is currently negotiating a loan of approximately 5 billion U.S. dollars under a repo scheme. Under this structure, Argentina would provide a portfolio of assets as collateral in exchange for fresh dollars. The primary objective is for the government to meet a debt payment of nearly 4 billion dollars due next January.
Experts’ Perspectives
Following the victory in October’s legislative elections, “long-term investment expectations in international financial markets improved, reducing JP Morgan’s country risk indicator from 1,080 basis points to the current 630–650,” said Rodolfo Sosa-García, PhD in Economics and Finance from The City University of New York and CEO of GALILEI Consulting, speaking to Funds Society from New York.
In his view, Milei’s government could return to international debt markets “optimally” once the country risk reaches the 450–550 range. All consulted experts shared this view. Sosa-García believes the country is “not far” from regaining access to international debt markets. However, he stressed that the current administration “must continue with long-term public policies: reduce inflation, increase the BCRA’s foreign reserves, liberalize the exchange rate, and control the fiscal deficit.”
A senior executive from a major international fund added that he sees “caution” among foreign investors regarding a potential new sovereign issuance. There is “expectation,” he told Funds Society, but international investors want “more evidence” because they still perceive “a binary political scenario.” In his opinion, demand would currently come mainly from local or Latin American investors.
“Today, there are no significant positions held by international investors in Argentina,” wrote Juan Ignacio Abuchdid, president of local financial holding Grupo IEB, in an opinion column in La Nación. “We have regained credibility, but we are still classified as a standalone market by MSCI, the global index that defines financial market categories,” he added.
“Argentina is getting closer and closer to regaining market access, although tasks remain,” assessed Alejo Rivas, strategist at Balanz. The country must “improve its external position and move forward on structural reforms; a swap or repo operation could also help. Once progress is made on these fronts, the yield curve could converge to levels seen in comparable countries like Nigeria, Egypt, Pakistan, or El Salvador, currently near 9% on the long end,” he noted.
Fiscal progress and the political backing earned by the government in the latest election are factors helping to sustain current rates, which are slightly above 10% on the long end of the curve. However, these rates are still not low enough to enable sustainable market access. “There is still ground to cover,” the professional summarized.
Eric Ritondale, Chief Economist at PUENTE, agreed with the assessment. “With short-term sovereign debt yielding in single digits, a return seems very close. However, we expect this to occur only by mid-2026, once yields compress further and several key milestones are achieved: legislative progress on the budget and reforms, definitions on how to address January maturities, the second IMF review scheduled for January/February 2026, an upgrade of the sovereign credit rating to B-, and a reserve buildup process by the Central Bank, potentially starting in March or April next year.”
In a webinar titled “Is Argentina Returning to the Markets?”, Martín Polo, Chief Strategist at Cohen, praised Milei’s government for its “strict fiscal discipline.” However, he noted that country risk still needs to fall, net reserves are far from the IMF-agreed target, and hinted that “the key lever for resolving these issues is the exchange rate.” With the real exchange rate at the same level as in June 2023 and commodity prices lower, “there’s plenty of ground to cover on the international market front,” he added.
Meanwhile, the Balanz strategist pointed out that “it’s most likely there will be some recalibration of the exchange rate scheme, expanding the floating band. Granting more freedom to the exchange rate—which is currently very close to the upper limit—and acknowledging that the Central Bank, in addition to the Treasury, should be buying reserves are logical steps, largely already priced in by the market.”
Regarding the bond buyback operation, Rivas noted that it could help partially ease maturities and provide the final boost. “Although the amortizing structure of the bonds makes it difficult to fully clear upcoming payments through such operations, they could still be useful. It will be key to assess the rate and term of any new debt issued to determine whether the operation effectively helps restore market access,” he concluded.
Juan José Vázquez, Head of Research at Cohen, took a more constructive stance. As he explained during the online seminar, with the buyback of short-term bonds, the government could go to international markets in January to raise funds and rebuild reserves. Most likely, he indicated, this first placement would close at a yield of around 9%.
