Reuters: US Dollar Report: FINEWS-Buenos Aires city sold $100 mln in local debt

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FINEWS-Buenos Aires city sold $100 mln in local debt Oct 25th 2012, 17:16 Thu Oct 25, 2012 1:16pm EDT The city of Buenos Aires sold $100 million in an 18-month local note carrying a coupon of 7.95 percent, the local finance secretary said, adding the country's capital will not tap debt markets again in 2013 because it has no need. The paper will be payable in Argentine pesos but linked to the dollar's level on the official foreign exchange market to protect against a depreciation of the peso. The proceeds of this issue will fund infrastructure projects. This was the first local government debt issue since Chaco province shook markets earlier this month by using pesos to repay dollar debts after the central bank blocked its access to greenbacks. Moody's called Chaco's move a default and downgraded Argentine provincial and municipal credit ratings, including that of the city of Buenos Aires. Last December, Buenos Aires sold $85 million worth of a similar one-year note at a yield of 9.25 percent. Since then, expectations have increased that the peso will depreciate at a faster pace against the dollar. On the Rofex futures market, April's peso contract is trading at 5.2050 per dollar. This compares with a 4.7525 per dollar ask price on the spot interbank market Thursday.

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