Argentina's Bond Sales Stall as $25B Debt Wall Looms

Argentina hasn’t sold a Bonar dollar bond at home in two months—the programme’s longest pause since it began in February—as the country faces about US$25 billion in hard-currency debt payments next year. Yields have climbed more than 500 basis points, topping 12%.

The economy is stalling. Growth has stopped, inflation remains stubbornly high and fears about unemployment are growing. That’s the setting for President Javier Milei’s government as it tries to line up money to meet its obligations, with a heavier maturity schedule running through 2030.

The Borrowing Gap

The government planned to sell almost US$1 billion more in the local market this year, followed by another US$5 billion in 2027. Higher global borrowing costs have also dashed hopes of a first-ever bond sale abroad. The plan to meet payments without relying on global bond markets depended on Central Bank dollar purchases, privatisations, multilateral financing and local issuance. Now the local share is weakening.

Economy Minister Luis Caputo said Wednesday the government still expects to issue local bonds next year, but could use a currency swap with China if it can’t. He pointed to Argentina’s US$19-billion swap line with China’s central bank, including about US$5 billion available to repay debt—roughly the amount the government hopes to raise through local-law dollar bonds in 2027. There’s a catch: the swap gives yuan to the Central Bank, not dollars directly to the Treasury, and its terms aren’t fully public. It isn’t a direct replacement for dollar bonds.

Missed Windows, Election Risk

The government passed up earlier opportunities. It explored an international bond sale in early 2026 and hired Alejandro Lew as finance secretary to lead the plan, but Milei rejected issuing debt because of the cost, and Lew resigned. Around June, rating upgrades pushed sovereign spreads toward 400 basis points, their lowest in about eight years, while all-in yields fell below 9%. Caputo again held off, favouring cheaper financing elsewhere, including the local dollar market.

“When authorities had the chance to smooth next year’s financing schedule, they chose not to, arguing that all-in yields were too high,” said Armando Armenta, senior economist at AllianceBernstein. “Now, that decision implies the 2027 election season will be bumpy.” Ramiro Blazquez, a Latin America strategist at StoneX, was blunter about the missed window: “It probably would have been a good idea for Argentina to issue internationally back then, and strengthen its reserves. Now it looks more complicated because I don’t see spreads falling meaningfully before the election.”

Local investors are already pricing in political risk. They’ve drawn a line between debt maturing before and after the October 2027 vote, and the yield gap between those local dollar bonds has widened to almost 500 basis points, according to data compiled by Bloomberg. Concern that Milei could lose next year’s election and end his pro-market policies is likely to grow.

The Government’s Defence

The government says it has built a cushion to defend the peso before the vote. Milei put the arsenal at roughly US$75 billion, including Central Bank dollar purchases, US$20 billion each in swap lines with the United States and China, and expected additional financing from banks and multilateral lenders. “We know that next year we have presidential elections,” Milei said this month in Paris. “That’s why we’ve spent this entire year getting ahead of it and preparing a bazooka of dollars.”

Argentina has also stepped up efforts to raise dollars. It recently announced the privatisation of water utility AySA, while the Central Bank accelerated greenback purchases this month. Some investors remain upbeat. Lamine Bougueroua, an EM fund manager at Carmignac, one of the largest holders of Argentine debt, called the sell-off “more of an entry point” and said, “I think they will be able to” raise the dollars they need.

Why This Matters:

A US$25 billion bill leaves little room for abstraction when a government leans on privatisation, swap lines and costly borrowing to cover it. Growth has stopped, inflation remains stubborn and joblessness is a growing worry, leaving households to absorb the strain while officials make financing decisions. The sale of public water utility AySA shows how debt pressure can push essential services toward the auction block. China’s swap terms aren’t fully public, leaving a basic accountability gap over how a major backstop would work. Investors are already splitting debt according to whether it matures before or after the October 2027 election, effectively putting a price on Argentine democracy itself. Voters will decide next year’s outcome. The cost of this year’s choices will land on them either way.