There are two reasons why 2027 is already raising concerns among investors holding Argentine government bonds.
The first is that the sources of financing the government of Javier Milei will rely on to meet next year’s debt payments remain unclear, despite the president’s claims that he has a US$125 billion “bazooka” at his disposal to prevent currency runs in 2027.
In 2027, the Milei administration will face debt maturities of nearly US$25 billion. Close to US$12 billion is owed to private bondholders, while US$7.5 billion is due to the International Monetary Fund (IMF).
The second concern is growing uncertainty over whether Milei, who is seeking reelection in the October 24, 2027, election, will be able to win in the first round.
The clearest sign of these concerns is the continued rise in Argentina’s country risk, as measured by JPMorgan’s EMBI+ index, which tracks the additional interest rate the country would have to pay to borrow on international markets.
At Tuesday’s close, country risk stood at 684 basis points, up nine points from the previous close, or 1.3%.
Although the index retreated after topping the 700-point threshold early in the trading session, it remained at its highest level since November 2025.
The index is based on the performance of a country’s bonds in international debt markets. When bond prices fall, country risk rises.
A more favorable international backdrop proved insufficient
In one of its latest daily reports, analysts at brokerage Cohen Aliados Financieros said that the market had “stopped charging Argentina for the external environment and started charging it for its 2027 dollar needs.”
They noted that between Friday, October 9, and Friday, October 16, the yield on 10-year US Treasury bonds fell from 5.24% to 5.09%, its lowest level since September 22.
“That decline in the benchmark rate should have helped emerging-market debt. However, Argentina’s country risk rose in each of the four trading sessions,” Cohen analysts said.
“What is being priced in is not peso-denominated solvency, which the fiscal surplus demonstrates month after month, but the ability to secure the dollars needed in 2027, for which there is still no clearly defined source,” they added.
Similarly, economist Gustavo Ber said investors “remain focused on the financing strategy” of the economy ministry, headed by Luis Caputo.
“That is why they are paying close attention to signals about alternative sources of financing, as well as the possible use of currency swaps,” he added.
For example, during his visit to the IMF in Bangkok, the capital of Thailand, Economy Minister Caputo said Argentina could draw on its currency swap with China to pay holders of dollar-denominated bonds issued under Argentine law.
In August, the Central Bank of Argentina renewed its US$19 billion currency swap with the People’s Bank of China for another five years. The agreement includes an activated portion amounting to US$5 billiion.
What the market is watching ahead of the election
Ber said that political uncertainty “has been deepening, prompting a cautious response from market participants.”
He noted that the political landscape still “offers no clear picture of electoral strategies,” while “the implied probability of the government’s reelection is declining, as reflected in the valuation of financial instruments.”
Attention is focused primarily on the opposition, particularly on whether Peronism can put together a ticket with broad support among its voters and avoid a potential split.
“A scenario with multiple presidential tickets could improve the ruling party’s chances, especially if the PASO primaries (Open, Simultaneous and Mandatory Primaries) are not held,” Ber said.
La entrada Argentina’s country risk hits its highest level in 11 months se publicó primero en Buenos Aires Herald.