The government stepped up to the plate with a new dollar bond to attract more conservative investors. It is the Bonar 2029 (AO29), which kicks off this Wednesday with its first tender and promises to pay a monthly income in dollars. The move aims to capture part of the US$1,500 million that bondholders collected this week from the payment of principal and interest on the Bonares and Globales, which the Treasury wants to return to public debt.
The instrument replicates the scheme already tested by the Bonar 2027 (AO27) and Bonar 2028 (AO28): a 6% annual coupon paid monthly, while the principal is repaid in full at maturity, scheduled for October 31, 2029. “Investing the value of a two-room apartment, US$300,000, you would earn about US$83,500 according to my curve estimate. That’s US$1,600 monthly income, better than an apartment, without endless entry and exit costs or problems,” compared Ariel Sbdar, CEO of Cocos Capital, on his social media.
The issuance is part of the official strategy to deepen financing in the local market and reduce dependence on international markets. And it comes just days after investors collected on Bonares and Globales bonds, a flow that the Treasury seeks to channel back into public debt. Therefore, unlike previous placements, in this first tender there will be no maximum award amount for the AO29. The only limit will be the total US$2,000 million to be issued to the market, a decision aimed precisely at facilitating the reinvestment of the US$1,500 million in MEP dollars that bondholders received from the Bonares coupon payment.
“We expect solid demand for the AO29, backed by the recent precedent of the AO28: each reopening had demand far exceeding the quota, with an extraordinary bid-to-cover that multiplied the offer by up to 17 times. The Treasury applied very low prorations (5.8% and 14.5%) and rates fell from 8.6% to 7.8%, reflecting greater appetite for Argentine risk and better market conditions. In this context, the AO29, despite extending one year longer than the AO28, maintains the same payment structure at 6% annual payable monthly, making it an attractive instrument for the retail investor,” said Emilio Botto, Head of Strategy and Investments at Mills Capital.
From Cocos Capital they also expect a good market reception. For the brokerage, it would not be “unreasonable to think” that the government would validate a “premium” to try to capture greater demand. In that sense, if it comes out with a yield of 8.5%, it would be equivalent to a price of US$93.7 per US$100 face value.
From Facimex Valores they noted that the AO29 will likely be placed at a yield close to 8% effective annual, in line with the reference currently offered by the Bonar 2029 (AN29). “This bond matures just one month later than the AO29 and has a very similar coupon of 6.5%, although it is payable semiannually instead of monthly,” they differentiated.
However, the main risk of this bond remains the time horizon. Unlike the Bonar 2027 (AO27), which matures before next year’s presidential elections, the AO29 extends its life until October 2029 and therefore incorporates the uncertainty associated with the next political cycle. But the government bets that the combination of a monthly income in dollars and a competitive rate will be enough to spark investor interest.
para mi este bonar 2029 es otro curro de massa y los kukas te prometen dolares pero despues te los pesifican con el cepo no inviertan un mango que estos viven de robarnos viva la libertad carajo
Para mí esto es otro curro de los mismos chorros de siempre. El Bonar 2029 es la estafa del año: los ricos cobran en dólares y los laburantes pagamos la fiesta. Me parece que el Gobierno y el FMI nos tienen podridos con estos bonos. ¡Viva la patria socialista, carajo!