San Juan Faces Higher Rates to Issue USD 600 Million Debt

San Juan is set to complete its first international debt issuance since the 1990s for up to USD 600 million. The bond would have a maturity of nine years and would be governed by New York law.

The transaction is taking place in an adverse environment for Argentine assets, after country risk exceeded 550 basis points. The deterioration of sovereign bonds has raised the cost of dollar financing and complicated initial estimates for the San Juan placement.

Preliminary projections placed the bond yield around 9% annually. However, the new scenario presents the challenge of keeping it below 10%. As an alternative, the province could reduce the issuance volume to avoid a larger rate increase.

Economy Minister Luis Caputo told investors gathered in New York that the Government does not plan to resort to international financing to cover its commitments next year. Nevertheless, the financial program for 2027 contemplates a potential Bonares 2029 placement of USD 5,000 million.

During Javier Milei's administration, provinces issued USD 4.875 billion under foreign law, with transactions from Córdoba, Buenos Aires City, Santa Fe, Entre Ríos, Chubut, and Neuquén. If San Juan proceeds, it will become the seventh jurisdiction to access these markets during the current presidential term.

The province also concentrates four mining projects approved under the Large Investment Incentive Regime (RIGI), with projected investments of USD 21.7 billion. Among them is Vicuña, a copper, gold and silver development advanced by Vicuña Corp, a company co-owned by BHP and Lundin Mining, in the cordilleran area bordering the Atacama Region.