The ten reasons for the Bank of America to maintain the commitment to Argentine bonds

From Bank of America (Bofa) In a report they called overflow the Argentine sovereign debt And, among the reasons, they wielded that the president Javier Milei is close to specifying an agreement with the IMP. In this regard, they stressed that the Minister of Economy, Luis CaputoHe said that they had already reached an agreement on the economic part of the agreement and that last Friday, the deputy director of the IMF, Gita Gopinath, tweeted on the “great progress” in the negotiations towards a new agreement,

“We continue to recommend an overpower of Argentina’s bonds in the midst of an imminent agreement with the IMF and a strong improvement of the foundations. The valuations remain attractive and the positioning of investors seems cleaner after the recent liquidation. Argentina’s exchange bond payments seem manageable in the middle of the continuation of multilateral policy and financing, “they said from the Bofa.

Bank of America’s ten reasons to recommend Argentine bonds

Reason No. 1: The agreement with the IMF is imminent

“An agreement at the personnel between Argentina and the IMF seems imminent,” they said from the bank. President Milei said he hopes to send the agreement to Congress in the next few days. “We hope that the IMF program will be approved by the Congress and the IMF board in April,” they added.

Reason No. 2: IMF + Multilateral Financing = Manejable Debt

“We hope that the loans of the IMF refinance most of the payments from Argentina to the IMF until 2028. The program should also facilitate the additional financing of other multilateral organizations. In this scenario, the remaining matches of exchange debt are manageable in the middle of the continuation of the policy, “they added in this case.

Reason N ° 3: Strong fiscal commitment

Fiscal credibility was built quickly after an impressive fiscal adjustment of almost 5 % of GDP in 2024, mainly through expenses. The zero fiscal deficit is feasible this year. Milei also promised to further reduce public spending as a percentage of GDP, highlight.

Reason N ° 4: The position became cleaner

According to a brief of the Banks of Amerca, they believe that “Global investors obtained profits after the impressive 2024 rally and that the positioning became cleaner.” From recent peaks, the bonds dropped approximately US $ 3.8 points (5.7%) on average. The objective for 2035 bonds is to obtain high yields of 9 % in the short term and low yields of 9 % by the end of the year, they explained.

Reason No. 5: GDP recovery is stronger than expected

The fifth reason is because the GDP bounced strongly in the second semester of 2024 and expect 5% growth in 2025. “A solid growth supports the fiscal balance and the ability to pay. Real wages have been completely recovered”they added.

Reason N ° 6: “Miracle” Uninflationary

The Bofa stressed that the Monthly inflation It fell from 25% (December 2023) to 2.2% (January 2025), which Encourage the re -delight of the economy.

Reason N ° 7: Government’s popular support

For the bank, Milei’s popularity remained firm during the difficult adjustment. Now, “economic recovery, before the mid -period elections, helps the popularity of the government,” they detailed.

Reason N ° 8: The energy boom supports the exchange rate

“The energy trade balance became a surplus of $ 5.7 billion in 2024 (the highest in 18 years),” they said.

Reason N ° 9: Structural reforms and deregulation

For Bank of America there is an “ambitious reform agenda for transition to a free market economy.”

Reason 10: Possible emission of global bonds after elections

Finally, recovering access to the market would allow renewing amortizations through markets, concludes the Bofa.