Argentina pauses dollar bond sales amid rising yields

Argentina has paused the sale of local dollar-denominated bonds, known as Bonares, due to a surge in borrowing costs. Yields on these instruments have risen by over 500 basis points to exceed 12 percent, making new issuances increasingly expensive for the government.

Economy Minister Luis Caputo indicated that if the government is unable to refinance these bonds under local law, it may tap into its currency swap line with China to cover financing needs. Argentina recently renewed a US$19-billion swap line with China’s central bank for another five years, which includes an “activated” portion totaling US$5 billion.

The pause in bond sales comes as the country faces approximately US$25 billion in hard-currency debt payments next year. Investors are increasingly focused on political risks surrounding President Javier Milei’s upcoming re-election bid in 2027, which has contributed to rising sovereign risk. While the government previously planned to rely on local bond issuances, the weakening of this pillar of support has heightened concerns regarding the country’s ability to meet its upcoming debt obligations.