Argentina Unexpectedly Announces Sale Of 100-Year Bonds

Tyler Durden's picture

One year after Argentina emerged from its latest sovereign bankruptcy, and at a time when the Latin American nation grapples with a surging budget deficit, Argentina surprised markets by announcing (on Twitter) its intention to sell its first 100-year bond, taking advantage of a world starved for yield.

The issuance, expected to price on Monday with a potential yield of 8.25% according to Reuters IFR - we expect this number to come down as the offering will likely be many times oversubscribed - came as a surprise, as Finance Minister Luis Caputo has said Argentina would meet the rest of its financing needs in non-dollar currencies after selling $7 billion in dollar bonds in January. According to Reuters, Citi and HSBC are acting as lead book runners on the deal, while Nomura Securities and Banco Santander are co-managers.

“Good for them,” Seaport's Michael Roche told Bloomberg. Not surprisingly, he recommends buying the bonds given the juicy 8.25% yield. “Spreads are low and looking stalled, so they should lock them in for as long as possible.”

Argentina, which has repeatedly defaulted on its sovereign bonds, and will eventually do the same with this latest batch as there is no way the country can remain solvent for the next century, battled for years with its creditors before reaching a settlement with an Elliott-led group in 2016 which allowed it to re-enter the global credit markets.

With the sale, Argentina will join Mexico, Ireland and the U.K. in selling debt that matures over a century. While Argentina issued last year what was at the time the largest emerging-market bond issuance on record, the move will test investor resolve in Argentina. The country is trying to close its fiscal deficit and has defaulted seven times in 200 years.

In 2015, Argentina's president Mauricio Macri was elected on the promise of "normalizing" Argentina's economy and financial markets after years of heavy state intervention and non-payment of international debt obligations under the previous government. Little did he know just how "supercharged" the normalization would be courtesy of the world's central banks.

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Dazman's picture

Best investment of the century!!!!!

The central planners's picture

A good way to pass "wealth" over generations to come?

bamawatson's picture

will mueller's investigation be concluded before the bonds mature ?

Blue Balls's picture

Like a crack whore getting another hit.

The central planners's picture

The Argentina government has a special product that fits with your desires, its the new 500 years bonds mueller's  proof.

Raffie's picture

what a screaming deal.

time to go all in.

peopledontwanttruth's picture

Whose buying them?
Turtles and Parrots?

ParkAveFlasher's picture

Your daughters, how much for them?  - Belushi

RagaMuffin's picture

buy the bond , get 2    ;-)

wildbad's picture

oh , gotta get me summa those

NugginFuts's picture

Count me in for all you can sell, amigos! And I need me some of those Moon Bonds too, of the 1,000 year variety. 

Countrybunkererd's picture

I am so pissed.  I always get my timing wrong.  I just took out a 50K HE loan and put it on TSLA.  Maybe I should switch it.  Or should I buy Whole Foods?

ParkAveFlasher's picture

The key to proper timing the market is to simply stop your clock.

Hurricane Baby's picture

The only 100-year investment I'll even consider is planting a live oak tree.

Ignatius's picture

Haiti is still in debt after breaking it's chattel bondage hundreds of years ago.

Any questions?

nmewn's picture

Well, to be fair, they did have a little help from a certain foundation who shall remain nameless  ;-)

Dame Ednas Possum's picture

When clam shells and coconuts are no longer accepted currency... it's time hand over the kids. 

 

nmewn's picture

Outta my way! Gimme soma dat!

What could possibly go wrong? 

Rainman's picture

Halleluja ...CalPers needs only 7.5% for 30 years so they'll be all over it !

nmewn's picture

If they hedge the 100yr Argentinian with the Venezuelan 200yr it's a lock! Governor Moonbeams problems are solved!  ;-)

shovelhead's picture

Pssst...(looks furtively around)

Hey buddy...Wanna buy a watch?

Stormtrooper's picture

I'll take one of those $10 Rolexes.

shizzledizzle's picture

"For the children" - No shit, becuase you'll be long dead before this one matures. 

GunnerySgtHartman's picture

Many, if not most, of the children will be dead, too!

bardot63's picture

Don't kid yourself.  the nation of argentina won't even exist.

August's picture

Geography favors the persistence of an Argentina.

I am Jobe's picture

Wow, 100 years then they will say additional 100 years. I am sure they can sell this to the sheeples in the USA 

IENTJ's picture

MOON BONDS are NEXT!

I TELL YA!

https://youtu.be/8QXpZ3ZmfHc

Seasmoke's picture

Next up the 250 years bond.  Step right up. The water is fine. 

bardot63's picture

Who the hell is stupid enough to jump into this sewer?  Well, apparently, there's a long list.....

numapepi's picture

Most probably our pension funds...

TalkToLind's picture

I don't know about you, but I can't wait to tie up my wealth up for 100 years to help finance gubermit operations!

bluskyes's picture

Centurian S&M action. What could go wrong?

numapepi's picture

A better investment would be to pile all your cash in a heap, douse it with kerosene, and set it afire.

Such an investor would get a far higher yield and return on investment.

Offthebeach's picture

Also Known As......Burn Rate  ( not to be confused with the Bern, Switzerland,  rate.  Or Bernie Sanders rate.)

Able Ape's picture

Who buys this shit?...

Stormtrooper's picture

Pension funds with your 401k.

NotDuesseldorf's picture

...while the responsible pension fund manager crosses his fingers the bonds will blow up after he got his bonus and has job hopped away.

silverer's picture

Goldman Sachs. Because in 100 years it won't be Argentina.

fightapathy's picture

100 year bonds? Argentina? THE Argentina that's gone bankrupt 14 time in the, uh, last 100 years?

 

"THEY'RE GOOD FOR IT!"

slyhill's picture

 Sigue jodiendo ese pollo

 

Dutch1206's picture

Where do I sign up?

pocomotion's picture

This could be a good thing for Argentina.  There's a lot of money in real estate TPTB have given for a piece, or swath, to possibly move to.  Maybe South of the equator is where to hang when they flush Fukushima.

Both South Africa and South America have a wealth of resources including fresh WATER...

August's picture

But South Africa has numerous pests.

fannyplucker's picture

Investors memory is short because this time it is different:)

Rothbardian in Cleveland's picture

100 year Argentine bond?

I too, like to live dangerously.

Dragon HAwk's picture

It's kind of like robbery, with a kiss and a promise to pay it back..

Too-Big-to-Bail's picture

I'll take one please, and could you SuperSize it?