Argentina’s Central Bank launched on Wednesday the fourth series of the BOPREAL, a bond intended for companies to pay off their international providers and creditors, and remit profits overseas. This series is allowed to be used to pay off debts acquired until December 2023 and send retained dividends generated until December 2024.

During the last months of Alberto Fernández’s administration in 2023, the monetary authority failed to provide companies with U.S. dollars at the official rate. To prevent economic activity from halting, the government allowed companies to purchase goods and services on credit. While still facing a scarcity in international reserves, the Milei administration allowed them to pay their debts with the BOPREAL’s first three series.

The first series of the BOPREAL bond was launched in December 2023, 17 days after Javier Milei was inaugurated as president of Argentina.

Capital controls also prevented business operations from remitting their dividends to their parent companies. Although some foreign exchange restrictions were lifted after Argentina reached an agreement with the International Monetary Fund (IMF) earlier in April, the Central Bank only allows the distribution of dividends from profits generated starting in fiscal year 2025. The remittance of retained earnings from previous years remains restricted.

According to an official communiqué, the Central Bank will issue a maximum of US$3 billion in various bond auctions, the first of which is scheduled for mid-May. As with the other BOPREAL series, they will be subscribed to in pesos at the official exchange rate and paid for in U.S. dollars.

The new BOPREAL will accrue an annual interest rate of 3%, payable semiannually. Principal will be amortized in a single payment in October 2028 and up to one third (US$1 billion) of the final issued amount will be allowed to be used to pay taxes and customs obligations.

“This new issuance seeks to advance in the resolution of inherited foreign exchange imbalances, associated with retained stocks of foreign debt,” the official communiqué said.