Argentine debt in flames: the value of bonds plummets and country risk soars

RIO DE JANEIRO, BRAZIL –  Argentina’s sovereign debt in dollars lost value again this Thursday both on Wall Street and in the local market.

Bonds traded under foreign legislation showed significant drops along the whole curve and the one that suffered the most was the Global 2030 (GD30), with a drop of 1.75%. The yield of this security, redeemable in US dollars and maturing in 2030, is already above 24% and does not seem to have a ceiling.

On the other hand, Argentine legislation bonds closed with losses of around 1% in Bolsas y Mercados Argentinos (ByMA).

“The presentation made by the Minister of Economy, Martín Guzmán, in front of the governors fell very badly, and from there the outlook for bonds worsened”, said Pedro Siaba Serrate, fixed income strategist at Portfolio Personal Inversiones, in reference to the minister’s presentation on the country’s negotiations with the International Monetary Fund.

The economist points out that Guzmán was also very “aggressive” in stating that Argentina would only have a fiscal balance in 2027.

UNICORNS FALL

On a very bad day for technology companies on Wall Street, the two unicorns of Argentine origin returned to the downward path they had been showing until a few months ago.

The e-commerce giant Mercado Libre fell 6.45% and so far this year has lost 16.1% of its value. At the same time, the software engineering and information technology firm Globant plunged 6.92%, accumulating a drop of 20% in 2022.

The main Wall Street indexes closed lower today, Thursday, as investors took profits, particularly in Nasdaq technology stocks after a three-day rally, while the main US banks are already expecting four rate hikes in 2022.