In the wake of the defeat of the ruling party in Congress and amid uncertainty in the market due to the fall of its first law, a group of Wall Street banks will embark on a trip to Argentina starting tomorrow. The visit will be led by representatives from Barclays, Bank of America, Citigroup, Goldman Sachs, and HSBC, along with a group of clients (mostly investment funds) to discuss Javier Milei’s program, bond prospects, and possible investments.
Investors are coming to “monitor” the sovereign bonds that several funds bought last December. With Milei’s rise to power and her promises to advance a shock plan, dollar titles rose up to 14%, but last week they fell to almost 7% after the setback suffered by the omnibus law and the war unleashed with governors.
“Each one will have different agendas,” one bank representative stated. “Some will be seeing if it is time to sell or not; others will be considering if it is worth buying.” They added that while all investors are interested in bonds (mostly sovereign), there may also be some corporate investments.
The banks hope their clients will have the opportunity to meet with key government officials such as Luis Caputo, Secretary of Finance; Pablo Quirno, head of the Central Bank; Santiago Bausili and Vladimir Werning vice president of Central Bank during their visit. However, a source from a large international forum stated that this trip is within the framework of annual visits organized in different countries in the region. The trip comes as BlackRock bought US$ 1.8 million of Bopreal dollar bond last week with which the government seeks to regularize commercial debt of companies. JP Morgan issued cautionary signals about Argentina recently predicting double-digit inflation until first quarter and confirmed that “the main risks are governability and population’s tolerance for adjustment.” The rejection of omnibus law was considered an unprecedented event by JP Morgan which warned that “the lack of support from Congress suggests that administration should recalculate its political strategy opening door for more difficult period leading greater volatility.”