Argentina to buy back $1 billion in foreign debt in signal to markets

Argentina to buy back $1 billion in foreign debt in signal to markets

BUENOS AIRES (Reuters) -Argentina will buy back foreign bonds equivalent to over $1 billion to improve the South American countrys debt profile, economy minister Sergio Massa said on Wednesday, looking to send a positive signal to markets despite low reserves levels.

The move will focus on sovereign bonds maturing in 2029 and 2030, the minister added, with the program set to start immediately, he said, as the country looks to take advantage of a “window of opportunity” after a debt risk index recently fell.

The unusual move, which Massa said could help boost the countrys access to capital markets, comes as Argentina battles to replenish foreign currency reserves, rein in rampant inflation and prop up a weakening local peso currency.

“This is a first step,” Massa said, adding that the government was targeting short-maturity bonds after an over 1,000 basis point drop in a closely watched country risk index since a peak in the middle of last year.

“Undoubtedly over the next few months, by inviting the private sector to accompany the Argentine state in this job of improving its (debt) profile, we will carry out other measures like the one we are taking today,” he added.

Argentinas sovereign bonds languish in distressed territory despite major restructurings in recent years with private creditors and the International Monetary Fund (IMF), with which it struck a $44 billion deal last year to push back repayments.

(Reporting by Walter Bianchi and Jorgelina do Rosario; Writing by Adam Jourdan; Editing by Chizu Nomiyama)