Argentina's benchmark 2035 bond yielded 13.77% on Nov. 6 as a global retreat from risk and concern over the 2027 presidential election drove up the country's borrowing costs, Bloomberg reported.
The yield was 12.67% at the end of the previous week, and the note lost more than 3 cents per dollar during the week. A JPMorgan index showed the extra yield on Argentine debt over U.S. bonds rising almost 140 basis points during the week's first four days to 928 basis points, according to Bloomberg.
Argentina's domestic markets were closed for a bank holiday on Nov. 6, but its bonds traded in New York, Bloomberg reported.
Investors have begun factoring the election into debt prices, BlackRock portfolio manager Pablo Goldberg told Bloomberg. Portfolio Personal Inversiones head of strategy Pedro Siaba Serrate developed a model that put the chance of President Javier Milei winning re-election at 45% based on bond prices, down from roughly 90% around July.
Bloomberg reported that Argentina continues to run a fiscal surplus. Investors are also weighing the election and the country's coming foreign-currency payments.
The 2035 note has lost nearly 20 cents per dollar since July, Bloomberg reported. At that point, Argentina's borrowing premium had neared 400 basis points, an eight-year low that raised expectations of a return to international bond markets. The government did not issue foreign debt.
The week's bond losses occurred alongside a surge in Argentina's overnight peso funding rate to 190% on Nov. 5, when dollar bonds were already weakening. The funding rate had been 26% a day earlier, as EconoTimes reported.
Bloomberg also reported unusually large purchases of local government bonds that fueled speculation about official intervention. VanEck portfolio manager David Austerweil said the scale of the buying raised concern about possible reserve losses.
Argentina faces about $25 billion in hard-currency payments in 2027, Bloomberg reported.
