Luis Caputo held a private meeting with investors at a JPMorgan Chase & Co. gathering on the sidelines of the IMF and World Bank meetings in Bangkok. Afterward, he said "there was a lot of focus on the political aspect" going into President Javier Milei's re-election push next year. Caputo added that "they also asked about the financial program for 2027, in the eventual case that the Bonares refinancing isn't possible," and that "we explained that in that case we could use the China swap." He spoke in an interview Wednesday after the meeting.
In July, Milei's administration laid out a 2027 plan to issue $5 billion in Bonares, the locally named notes, as part of a $25 billion funding program intended for next year. That plan ran into fresh doubt when Caputo paused Bonar issuance in mid August amid high US Treasury yields. Up to that point, the bonds had given the government crucial hard currency while it has avoided a return to international capital markets.
In August, Argentina's central bank extended its $19 billion currency swap with China's central bank for an additional five years, including an "activated" portion totaling $5 billion that matches the planned Bonares size. Caputo also noted that the US has a distinct $20 billion swap facility that will still be available next year to help steady markets ahead of the election, though he did not present it as a direct backstop for any Bonares funding shortfall. Mounting election jitters and the possible funding shortfall have lifted the country's risk premium to 600 basis points, after touching a trough of 410 in early July, dimming the chances of a near-term market rebound.
During his time in Bangkok, Caputo held separate meetings with IMF Managing Director Kristalina Georgieva and World Bank President Ajay Banga, saying both offered praise for Argentina's economic approach. He said the World Bank is evaluating a potential increase in the funds available for the country. On long running GDP warrant issues, he told investors the government intends to resolve legacy claims in due time. "It takes time," he said, pointing to the government's record of meeting its bondholder obligations.
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Argentina is signaling a belt and suspenders approach: pause issuance while rates are unfriendly, keep multiple swap lines in reach, and cultivate multilateral support. The widening risk premium from 410 to 600 basis points since early July is the market's tell. For everyday investors, the moving pieces to watch are straightforward: election timing, whether Bonares get refinanced, and how readily those swap lines are tapped.
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