Argentina is set to launch a $12 billion-plus bond that would mark a return to the capital markets after 14 years and settle a lengthy dispute with global hedge funds.
On Thursday, the Argentinian Senate voted 54-16 to allow President Mauricio Macri to issue the bond and use part of the funds raised to pay so-called holdout creditors, according to news wires.
This would mark the country's re-entry to the global capital markets since its massive default in 2001-2002.
"The senate's decision moves us a step closer to overcome the default and close a long chapter of international financial isolation," Alberto Ramos, head of Latin American economics at Goldman Sachs, told CNBC on Thursday via email.
The bond is expected to raise at least $12 billion, of which $11.68 billion will be used to pay holdout creditors, according to the head of Latin American debt capital markets at BNP Paribas.
Marcelo Delmar said Argentina would likely issue $15 billion in total, using the extra $3 billion to close the government's fiscal gap.
"This is a necessary, and probably final, step towards reinserting Argentina in the international markets. The country owes no money to the IMF, is current with the Paris Club and multilaterals, so it will hopefully put an end to an era of isolation," he told CNBC via email on Thursday.
The Senate vote, achieved after Macri courted support from politicians in former President Cristina Kirchner's leftist Front for Victory bloc, was the last major hurdle Macri faced before he could launch the bond and marks a significant achievement for the pro-business leader.
Under Kirchner, Argentina was locked out of the capital markets as hedge funds sued the country for not paying out on its bonds. Kirchner struck an antagonistic tone in negotiations with creditors, saying she would never rob Argentinians to pay those she called "vulture funds."
A surprisingly high number of Kirchner's one-time allies opted to support Macri, saying it was time to boost the battered economy, according to news wires.
Argentina is crippled by hyper-inflation, which averaged 27 percent in 2015; creaking infrastructure; a shortage of hard currency; and low investor confidence after more than a decade of free-spending leftist populism rule that ended with the election of Macri in November.
The center-right leader has moved quickly to push through changes, lifting capital and trade controls, cutting power subsidies and meeting with U.S. President Barack Obama in a move to negate tensions built up under Kirchner's rule.
Other measures on the horizon include hikes to tariffs on water, gas fuel, transport and telephone usage, as part of ongoing steps to combat the fiscal deficit. Macri's government has announced plans to cut the primary deficit each year until 2019, from 4.8 percent by the end of 2016 to 0.3 percent by 2019.
Taming inflation is seen as the next major challenge.
"The government wants to concentrate these adjustments in the next couple of months while it retains political capital," Nicholas Watson, senior vice president at risk consultancy Teneo Intelligence, told CNBC via email on Thursday.
"Also, Macri wants to see signs of recovery in the second half of the year, especially inflation on a downward trend. This is going to be tough."