Nov. 3 (Bloomberg) -- Buenos Aires Mayor Mauricio Macri sent a bill to the city legislature that would allow it to go forward with a delayed $250 million international bond sale without federal approval, the head of the city’s public credit department said.

The bonds will mature in five to seven years, public credit Chief Abel Fernandez said in an interview in Buenos Aires. He declined to say what the bonds will yield. Buenos Aires will sell the bonds as soon as the legislature approves the bill, which could be this month, he said. President Cristina Fernandez de Kirchner’s administration didn’t respond to Buenos Aires’ request for approval of its bond sale, Fernandez said.

Buenos Aires is looking to sell bonds abroad as Argentina negotiates a settlement with creditors holding $20 billion of defaulted bonds in a bid to regain access to overseas debt markets. Macri, a political opponent of the president and her husband and predecessor, Nestor Kirchner, is seeking to replace a law that requires local governments obtain federal approval for bond sales.

“The city complied with all of the requirements, so we have no other option than to withdraw from the federal program,” Fernandez said. “We will replace it with a city law that has the original restrictions included in the federal fiscal responsibility plan and is under the control of the local legislature.”

Easing of Restrictions

An Economy Ministry spokesman didn’t immediately return a call seeking comment.

A majority of 31 lawmakers, 26 of whom are from Macri’s party, will approve the bill this month, Fernandez said. Congress, which last week eased restrictions to allow provinces to sell bonds as their budget deficits have more than doubled, still requires that they obtain federal approval.

The federal fiscal responsibility law isn’t mandatory and, unlike many provinces, the city doesn’t rely on federal funding to meet its needs, Fernandez said.

“We are politically and financially independent from the federal government,” he said.

Buenos Aires will use proceeds of the bond sale to fund public works projects, Fernandez said. The government’s Oct. 22 announcement that it will reopen an offer to swap defaulted debt left out of a 2005 restructuring has sparked investor demand for Argentine bonds, he said.

The city said in March 2008 that it hired a group led by Barclays Capital Plc, Citigroup Inc. and Banco Macro SA to manage a $500 million bond sale. Fernandez declined to identify the banks that may arrange the bond issue.

‘Bono Tango’

Buenos Aires will offer the bonds as part of the so-called “Bono Tango” fundraising program that began in 1996, Fernandez said. The city plans to sell half of the $500 million in bonds it announced last year because it has since covered half of the public works spending, he said.

To help meet financing needs this year, Buenos Aires sold 630 million pesos in treasury notes maturing in up to one year, Fernandez said. The outstanding balance should drop to 300 million pesos by the end of the year, and the city’s 2010 budget allows for the sale of up to 950 million pesos in treasury notes, he said.

Buenos Aires also plans to sell local bonds due in up to two years in 2010, Fernandez said. The city’s outstanding debt totals $450 million, or 12 percent of annual revenue, he said.

To contact the reporter on this story: Drew Benson in Buenos Aires at abenson9@bloomberg.net

Last Updated: November 3, 2009 17:11 EST