Argentina’s Economy Ministry successfully raised US$1 billion through the BONTE, a bond whose tender took place on Wednesday. The BONTE, aimed at foreign investors, is bought in U.S. dollars and paid for in Argentine pesos.

The proceeds from the sale will be used to strengthen the Central Bank’s depleted international reserves. Gross international reserves are US$38.63 billion, and Argentina’s monetary authority has not bought dollars directly in the foreign exchange market since the government struck a deal with the International Monetary Fund (IMF).

The bond’s annual rate is 29.5% and it matures on May 30, 2030. It includes a two-year put — an option for the holder to sell the asset by a specified date — coinciding with the beginning of the 2027 presidential electoral campaign.

Investors presented 146 offers amounting to US$1.69 billion, almost US$700 million more than what the Finance Secretariat sold in the tender. The exchange rate used for the transaction was at AR$1,148 per dollar, meaning that the sold amount was AR$1.15 trillion.

Finance Secretary Pablo Quirno said in a post on X that the new bond meant “access to international investors to refinance debt capital in local currency” and increasing the international reserves without increasing the debt. Quirno added that the BONTE extended the average maturity of peso debt and broadened the universe of investors interested in peso bonds.

Pablo Lazatti, CEO of financial advisor firm Insider Finance, called the tender “very positive” and added that it “reaffirms foreign investors’ interests in Argentine debt.” According to Lazatti, the 29.5% rate for the BONTE was well-received, and that could mean a downward trend of the rate at which banks lend to companies and individuals, “from the 45%-50% it is today, to a figure closer to 30%.”

Other debt instruments were allocated during the tender: five LECAP bills, one BONCAP bond, and a BONCER zero-coupon bond. The market demanded AR$8.31 trillion, and a total cash value of AR$7.41 trillion was awarded.

“This means a rollover of 126.28% on current maturities and 100.12% including coupon payments and redemptions made last week,” said Quirno.