Argentina's government plans to open a debt swap to mop up bonds leftover from a massive 2002 debt default, allowing it to issue new debt in global credit markets to help ease tight state finances in a preelection year.
"The likelihood that the swap will take place in the next few weeks appears more and more likely," Buenos Aires-based financing group Grupo SBS said in a research note.
Economy Minister Amado Boudou said earlier this week the government would soon wrap up the paperwork needed to launch the operation with the U.S. Securities Exchange Commission, reaffirming his aim to start the swap this month.
Argentine sovereign bonds were slightly outperforming the JPMorgan Emerging Markets Bond Index Plus 11EMJ, with spreads tightening 15 basis points to 749 basis points over U.S. Treasuries prices. Overall emerging-maket spreads narrowed 13 basis points to 272 basis points, according to the indicator. (Reporting by Jorge Otaola; Writing by Helen Popper)