Argentina sold 100-year bonds barely a year after settling aprotracted legal dispute tied to a $95 billion default.

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With the $2.75 billion sale, the government of South America'ssecond-largest economy joins Mexico, Ireland and the U.K. inissuing debt that matures over a century, which is oftenparticularly attractive to insurers and pension funds seeking tolock in long-term returns. Argentina, for its part, is takingadvantage of historically low borrowing costs to finance the budgetand pay off debt that's maturing in the next few years.

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Argentina has staged a spectacular turnaround in the capitalmarkets just a year after ending its long-running dispute withcreditors over its 2001 default, issuing a then-record amount ofdebt for an emerging-market country and posting better-than-averagegains over the past 12 months. Its debt now yields an average ofabout 4 percentage points more than similar-maturity U.S.Treasuries, less than one-third the level of just four yearsago.

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“Good for them,” said Michael Roche, a New York-basedfixed-income strategist at Seaport Global Holdings, who recommendsbuying the century bonds. “Spreads are low and looking stalled, sothey should lock them in for as long as possible.”

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The notes sold at 90 cents on the dollar to yield 7.917%,according to a person with knowledge of the matter, who asked notto be identified because the deal is private. That's a higher yieldthan where any other government or corporate dollar debt due in 80years or more is trading, according to data compiled by Bloombergthat excluded perpetual securities. Bonds due in 2115 issued by aunit of Brazil's state-run oil company Petrobras rank second,yielding 7.79%, the data show.

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Argentina's issuance comes as global money managers flock toemerging-market funds, pumping in $38.6 billion in 20 straightweeks of inflows. The bonds of developing nations have become thedarlings of investors in 2017 as the economic outlook for some ofthose countries brightened and fund managers grew more confidentthat demand for higher-yielding assets can withstand U.S.interest-rate increases.

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Spreads on an index of emerging-market sovereign dollar debtshrank to the narrowest in four years last month, and remain closeto those levels.

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Argentina's government was able to sell the bonds because itregained “the world's credibility and its confidence in Argentinaand the future of our economy,” Finance Minister Luis Caputo saidin a statement.

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Citigroup and HSBC Holdings managed the sale. Yields onArgentine government notes rose, with the average spread over U.S.Treasuries widening 6 basis points to 4.12 percentage points,according to JPMorgan Chase & Co. data.

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The country is benefiting from strong demand for higher-yieldingbonds amid suppressed interest rates in the developed world,according to Guido Chamorro, a senior investment manager at PictetAsset Management Limited in London. Selling such a long maturitymay be part of a marketing strategy to garner attention, Chamorrosaid.

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Argentina has defaulted on its debt seven times in the past 200years and three times in the past 23 years. During negotiationsthat lasted more than a decade over defaulted bonds from the 2001financial crisis, the government of then-President CristinaFernandez de Kirchner exasperated U.S. Judge Thomas Griesa so muchthat he described Argentina as a “uniquely recalcitrantdebtor.”

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Before Monday, the government had issued about $7.5 billion ofdollar and Swiss franc-bonds this year as part of a financing planthat has earmarked for $10 billion in foreign sales.

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Some investors were concerned that the proposed yield on the newissuance was too low given how recently the country hasdefaulted.

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“The market has a short memory,” said Victor Fu, the director ofemerging-market sovereign strategy at Stifel Nicolaus & Co.“The deal itself doesn't worry me, although the multiyear tight EMspreads are a bit concerning.”

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Bloomberg News

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