Analysis: Bonds and bellows in Argentina

OREANDA-NEWS. April 15, 2016. Shale-prone Argentina is advancing a high-profile return to international capital markets, but political risks to the government economic reform package surfaced yesterday with the re-emergence of former president Cristina Fern?ndez de Kirchner.

The five-month-old government of president Mauricio Macri is close to ending a long legal battle with a group of holdout creditors that was born out of the country's 2001 default on almost \\$100bn in debt.

A US appeals court gave the final push toward a resolution yesterday, when it ruled the country can once again service its restructured debt, effectively lifting a restriction that pushed the country into technical default again in 2014.

"One more step toward normalcy and development," finance minister Alfonso Prat-Gay said after the ruling.

The government will now issue \\$15bn in debt that will mark its return to capital markets after a 15-year hiatus.

Sealing a deal with the holdouts is a cornerstone of Macri effort to restore global financial ties and attract more foreign investment in key economic sectors such as energy and infrastructure.

Government officials have been wooing investors in a roadshow this week, with the goal of defining the final terms for next week?s bond issuance.

As the government celebrated yesterday ruling in New York, thousands of Fernandez supporters gathered on the streets outside the federal criminal court in downtown Buenos Aires to express their support as she appeared before a judge in a fraud investigation relating to the sale of dollar futures during her administration.

Fernandez, who now holds no public office, presented a written statement to Judge Claudio Bonado denying any wrongdoing, characterizing herself as the victim of a political persecution.

Outside the courtroom, Fern?ndez spoke out against Macri's policies, including the firing of thousands of state workers and subsidy cuts on utilities and transport.

Bonad?o will now have to decide whether to indict Fernandez in the case. A prosecutor also formally accused Fern?ndez on 9 April of money laundering.

"They can put me in prison but they cant silence me," Fernandez told supporters.

The courts have been stepping up investigations into several high-profile businessmen who were allies of the previous administration.

The large gathering in support of the former president amounted to a show of strength but also a reminder that no one else has been able to assume the opposition mantle.

Fern?ndez's congressional alliance has split and several former allies have sided with the Macri administration on key votes, including a bill approving a deal with the holdouts.

Before yesterday, Fernandez had been out of the public eye since leaving office in December, remaining in her southern home province of Santa Cruz.