Argentina says bond issue possible, depends on market By Reuters

BUENOS AIRES, May 11 (Reuters) - Argentina could still place a $1 billion global bond, depending on market conditions by the end of the week, Economy Minister Amado Boudou told a local radio station on Tuesday.

South America's No. 2 economy has been planning to issue a new bond parallel to an exchange of defaulted debt but wants to price the bond at a yield of less than 10 percent.

That pricing is seen difficult as the debt crisis in Europe has pushed investors toward less risky investments.

The possibility "is open, it will depend on market conditions by Friday," Boudou told Radio El Mundo in a telephone interview from New York, where he is promoting Argentina's debt swap offer.

Argentina has not tapped international debt markets to raise money for more than eight years, following a 2002 default on some $100 billion in debt.

It recently launched an offer of new bonds and cash to investors who still hold $18.3 billion in non-performing bonds. Most of the defaulted debt was tendered in a 2005 restructuring, but some investors held out and sued to try to recover the full face value of their bonds.

Argentine financial newspaper Ambito Financiero reported on Tuesday that Boudou will announce on Friday a delay in the issue of the $1 billion 2017 bond until market conditions are more favorable.

In April Argentina's country risk -- which measures the spread between benchmark bonds and comparable U.S. Treasuries -- dropped below 600 basis points in anticipation of the swap. But the spread widened again and stood at 748 basis points on Tuesday morning 11EMJ.

Institutional investors have until Wednesday to enter the swap without being penalized, and Argentina is scheduled to announce their participation rate on Monday. Retail investors have until June 7 to enter the exchange.

Although Argentina's budget is tight as the government raises social spending in a pre-election year, economists say it can meet rising debt obligations because it has tapped Central Bank reserves. (Reporting by Guido Nejamkis; Writing by Fiona Ortiz; Editing by Padraic Cassidy)