By Taos Turner
BUENOS AIRES -- Argentina sold $7 billion in five- and 10-year bonds on Thursday as government officials moved to meet most of their 2017 financing needs this month on expectations interest rates will rise after U.S. President-elect Donald Trump takes office.
Argentina sold $3.25 billion in five-year bonds at an interest rate of 5.625% and $3.75 billion 10-bonds at 7%. That puts the government's financing costs down about 200 basis points from April, when it issued $16.5 billion in debt.
The country received offers to buy $22 billion in debt, the Finance Ministry said.
"We're very happy with the results of this issuance because we've significantly lowered our financing costs even as we face an outlook of much more adverse rates than a year ago," Finance Minister Luis Caputo said in a statement.
"This confirms the trust that investors have in our capacity to control inflation and spur economic growth," he added.
Annual inflation totaled about 40% in Argentina at the end of last year, though central bank officials hope to lower that to between 12% and 17% by the end of 2017.
Economists expect the inflation rate to decelerate to about 22% this year while they see the economy expanding about 3% after shrinking more than 2% this year.
The bond sale comes a week after the government agreed to borrow $6 billion in 18-month debt from a group of international banks including Santander, BBVA Frances, Citibank, Deutsche Bank, HSBC and J.P. Morgan.
Taken together, the bond issuance and the short-term loan deal allow Argentina to meet about 65% of its need to issue fresh debt this year, Mr. Caputo said last week.
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(END) Dow Jones Newswires
January 19, 2017 15:46 ET (20:46 GMT)
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