Road to recovery: Argentina’s return to international capital markets
Source: Word Finance
By: Juan Manuel Pazos
It has been just over a year since Argentina was able to return to global capital markets following 15 years of exclusion. The resolution was quicker than expected and well received by markets; significantly, the state’s private and public sectors embraced the new opportunities offered by global investors from the moment the announcement was made.
Today, the fruits of such a meaningful structural change are gradually starting to emerge. However, there is still so much more to come, particularly as regaining access to financing translates into a variety of investment projects across an array of sectors that are currently in great demand.
The true cost of 15 years of financial exclusion was deeply marked on all aspects of the Argentinian economy. The central government, which had been engaged in a long-standing dispute with a group of holdouts from its 2001 sovereign debt default, was simply unable to issue debt in global markets, given the numerous attachment risks involved. This kept the level of country risk high, making funding for the private and public sectors very limited and expensive. Even multilateral lending was limited against this backdrop, as Argentina was classed as a risky debtor.
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