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Argentina May Offer Put Option on Local Bonds to Entice Buyers

  • Argentina’s central bank is in talks with private lenders about adding a put option to its local bonds that would compel the monetary authority to buy back the notes if prices fall too far.
    • Technical staff from private banks met Monday with the central bank’s general manager, Agustin Torcassi, to discuss the possibility, according to people with direct knowledge of the matter.
  • In the plan under discussion, the central bank would be the counterparty for the option, according to the people, who asked not to be identified discussing confidential meetings. The contract would have a 2% annual cost to the banks that purchase them.

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