Argentina: Dollar Bonds Extend Their Plunge, Country Risk Exceeds 1,500 Points

Argentina’s dollar-denominated sovereign bonds are accelerating their decline due to both economic and political factors, continuing a trend that began earlier this month.

On Wednesday, June 5th, dollar bonds extended their losses but moderated their initial drop amidst local economic and political uncertainty. This situation pushed the country’s risk premium above 1,500 points, although it later dipped below this critical level. Meanwhile, ADRs are mostly trading higher.

In this complex environment, dollar-denominated bonds are experiencing widespread declines. The most affected are the Global 2046 (-5.1%), the Global 2038 (-2.5%), and the Bonar 2029 (-1.8%). Conversely, the Global 2041 (+0.6%) and the Bonar 2030 (+0.2%) have turned around and are now rising.

As a result, Argentina’s country risk has increased by 1.1%, once again surpassing the 1,500-point mark, a level it has maintained for most of the session.

Locally, the treatment of the Base Law in the Senate and the expiration of the currency swap with China are causing caution among investors.

Adding to this, the members of the lower house have voted on a new pension system.

Leading stocks on the Buenos Aires stock exchange erased their early losses and are struggling to end the day in positive territory, rising 0.6% following the preliminary approval of a new pension mobility law that could impact public finances.

Within the leading panel, notable declines include Ternium (-2.1%), Sociedad Comercial del Plata (-2%), Banco Macro (-0.7%), and BYMA (-0.6%). Conversely, the recovery of the Buenos Aires stock market is led by Edenor (+3.3%), YPF (+2.8%), and Loma Negra (+2.8%).

Regarding the stocks of Argentine companies trading on Wall Street, the trend mirrors the local market, with gains leading. The increases are led by Edenor (+4%), YPF (+3.5%), and Loma Negra (+2.6%).