Argentina has been absent from the international bond market for 15 years after it committed a default. In spite of a history of default, Argentina just sold $16.5 billion of bonds. Clearly investors feel very good about Argentina now.
- There are several items that stand out in the bond sale: It was originally believed that Argentina would offer about $10 billion worth of bonds.
- Underwriters received offers to buy $70 billion.
- Argentina took advantage of the overwhelming demand to sell $16.5 billion.
- This is the largest ever emerging markets bond sale. In spite of Argentina’s negative history, investors bought $2.75 billion of 30 year bonds.
- In spite of high risk the yield on 30 year bonds is only 8%, much lower than originally anticipated.
From this bond sale it is clear that investors believe that Argentina has turned a corner after 15 years.