After Caputo’s nod, bonds start the week on the rise and country risk hits a new low

Debt securities advance slightly to 0.2% and chain a new upgrade wheel. “The Globals closed the week with average advances of 0.3%, continuing the rally that began after the credit rating improvement granted by S&P Global Ratings to B-. The driver external was no less: the de-escalation of the conflict in the Middle East led to a collapse in the price of crude oil of almost 10%, which, far from negatively infecting sovereign debt, acted as a sign of geopolitical relief for emerging risk assets in general,” they commented on PPI.

The Executive’s “wink” propped up quotes. “The week started with good news for Argentine assets. The Executive Branch published today in the Official Gazette Decree 478/2026, signed by Milei, Adorni and Caputo, which enables the National Treasury to take on debt in dollars with international financial entities with partial guarantees from multilateral organizations, for up to US$ 5,000 million. The stated objective is to reduce the Treasury’s financing cost,” they explained.

For their part, Cohen analysts reinforced the idea: “The operation strengthens external credibility in a context of compression of country risk and reinforces the roadmap towards the voluntary capital market”.

The JP Morgan indicator accumulates a drop of 14.4% since the beginning of June. The next “milestone” for country risk would be to break the floor of 400 units to guarantee the country to go out and take on debt with lower rates, aligned with that of Argentina’s regional peers.

The expectation is that, once this mark has been passed, the Government will finally be encouraged to take advantage of that window of opportunity to finally return to the international debt market. “An issue of between US$ 3,000 million and US$ 4,000 million would be compatible with the need for remaining financing, after considering the primary surplus, privatizations, support from multilateral organizations and disbursements from syndicated loans with multilateral guarantees,” they commented on Max Capital while highlighting that “this movement would completely clear up any doubts about the sources of financing for 2027, although it would still require some purchases of dollars using pesos.”

However, they warned: “The government might prefer to wait for the next administration, when spreads could compress further. An issue would be well received by the market, as it would be seen as a mechanism to preserve reserves. In a context of tight spreads within the universe high yield and stable popularity of President Milei, the bonds could still offer additional compression of approximately 50 basis points.”