Argentina Agrees to Borrow $5 Billion From Wall Street Banks [View all]

[Judi Lynn]

Argentina Agrees to Borrow $5 Billion From Wall Street Banks

by Carolina Millan

Katia Porzecanski

January 29, 2016 — 2:45 PM CST
Updated on January 29, 2016 — 4:02 PM CST

Argentina’s central bank reached terms with seven Wall Street banks for $5 billion of loans as the government looks to bolster reserves ahead of talks with holdout creditors next week.

The one-year loan, finalized Friday, will be backed by sovereign bonds, according to an e-mailed statement from the central bank.

Argentina has been seeking to shore up its central bank reserves after years of currency controls and policies that discouraged investment and depleted the country’s supply of dollars. Unable to tap international bond markets because of a decade-long feud with creditors left over from the nation’s 2001 default, the country’s cash hoard dropped to a nine-year low last month. Next week, officials will begin settlement talks with holders of some defaulted bonds who won a U.S. court order requiring they be paid in full.

HSBC Holdings Plc, JPMorgan Chase & Co. and Banco Santander SA are each providing $1 billion in loans, according to three people familiar with the matter who asked not to be identified because the information is private. Deutsche Bank AG, Banco Bilbao Vizcaya Argentaria SA, Citigroup Inc. and UBS Group AG will each provide $500 million, the people said. The interest rate is Libor plus 6.15 percentage points, the people said.

More:
http://www.bloomberg.com/news/articles/2016-01-29/argentina-agrees-to-5-billion-of-loans-from-wall-street-banks