UPDATE 1-US buys more Argentine pesos, working on $20 billion debt facility, Bessent says

(Adds details on Argentine elections, swap line, US support pledge in paragraphs 4-13) * Bessent says new Argentina debt facility would bring US support to $40 billion * US purchased pesos on Wednesday morning, US Treasury chief says * Bessent says IMF SDRs to back $20 billion swap line from Exchange Stabilization Fund By David Lawder WASHINGTON, Oct 15 (Reuters) – The U.S. again purchased Argentine pesos in the open market on Wednesday, Treasury Secretary Scott Bessent told reporters, adding that the department was working with banks and investment funds to create a $20 billion facility to invest in the South American country's sovereign debt. Bessent said during a press conference that the facility would sit alongside a new $20 billion U.S. currency swap line for Argentina, providing a total of $40 billion in support for Latin America's third-largest economy. Bessent did not provide details of the peso operation, which follows an initial U.S. purchase on October 9. He also clarified that the U.S. would continue to support Argentina financially as long as President Javier Milei's government pursues "good policies," regardless of the outcome of a parliamentary election on October 26. President Donald Trump said on Tuesday that the U.S. would not "waste our time" with Argentina if Milei's party loses the elections. Bessent said the Trump administration's support for Argentina "is not election-specific," but a win for Milei's La Libertad Avanza party would ensure that the right-wing Argentine president has a sufficient majority to be able to veto policies aimed at ending his libertarian fiscal austerity agenda and free-market overhauls of the country's crisis-prone economy. "It is policy-specific. So as long as Argentina continues enacting good policy, they will have U.S. support," Bessent said. BESSENT SAYS 'WE COULD' BUY DEBT Asked if the peso operation would be accompanied by U.S. purchases of Argentine debt, Bessent said, "We could," without elaborating. Work on the private-sector debt investment facility has been underway for weeks, but Bessent did not provide a timeline for any debt purchases. "So it is a private-sector solution to Argentina's upcoming debt payments," Bessent said. "Many banks are interested in it, and many sovereign funds have expressed interest in being part of it." The Trump administration has disclosed few details about the $20 billion swap line that it has pledged to Argentina. Bessent confirmed it would be backed by International Monetary Fund Special Drawing Rights assets that are held in the Treasury's Exchange Stabilization Fund and would be converted to dollars. Asked whether the U.S. would assume a preferred creditor status ahead of the IMF or private-sector lenders, Bessent said: "No, that's what China does, we don't do that." (Reporting by David Lawder; editing by Paul Simao)

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