In From the Cold: Argentina’s Big Week on Wall Street

Argentina’s new president Mauricio Macri has wasted no time rehabilitating the country in the eyes of foreign investors.

In just four months, Argentina has gone from name-calling hedge funds to a landmark deal that will pay the “vultures” $4.65 billion and resolve a 14-year battle that has effectively cut the country off from global bond markets.

Macri has also slashed energy subsidies funded by the nation’s massive budget deficit, lifted capital and currency restrictions, cut thousands of government jobs, and hosted his counterpart, Barack Obama, as he begins to repair relations with the US. Next week is when it all comes together.

The government has reached an agreement with its hedge fund creditors, led by Paul Singer’s Elliott Management, to finally settle all debts by April 14. That event will pave the way for Argentina to re-enter the global bond markets. And after the long wait, the country doesn’t plan to sit on the sidelines for long. Finance Minister Alfonso Prat-Gay will travel to the Bahamas for the annual meeting of the InterAmerican Development Bank this weekend, seeking $5 billion in loans through 2019. From there, he’ll head to New York for an investor “road show” to raise as much as $12 billion.

Some investors are already growing nervous that the government is planning to borrow too much. Others, however, can’t invest enough. According to Brian Joseph, a partner at Puente, one of Argentina’s largest brokerage houses, Argentine bonds are currently rated at “selective default” but should rank several levels higher at B or B-.

In an interview with Frontera News, Joseph stated that the country’s stock market, among the top performers this year, could soar further if Macri’s investor-friendly reforms convince MSCI to lift the nation back to ‘emerging market’ status from ‘frontier’. Companies that fulfill MSCI’s requirements in terms of liquidity and other metrics include Banco Marco, Banco Galicia, BBVA Banco Frances and YPF.