Only in Argentina: Junk-Rated Bonds Yield Less Than Treasuries

For all of President Javier Milei’s libertarian reforms, there are still all sorts of byzantine financial rules in place, like restrictions on lending and moving money overseas, that are creating distortions in Argentina’s capital markets.

The most prominent of those distortions right now: The sudden rush by local companies to lock in interest rates on dollar-denominated bonds that are below what US Treasury bonds pay.

Lender Banco Supervielle sold $20 million of one-year local notes in May at an interest rate of 3.25%, below comparable Treasury yields of around 4%. Oil producer YPF SA placed $122 million in a ...