UDPATE: Argentina Bonds Edge Higher Ahead Of Boden Payment

BUENOS AIRES -- Argentine bonds generally closed slightly higher Friday ahead of a big payday on the Boden 2012 bonds set for Monday, while stocks wrapped up a big month of gains with another nudge higher.

The government is set to kick off August with a $2.254 billion payment on the debt. Capital payments on the bonds total $2.177 billion, while interest due comes to $77 million, according to online brokerage Portfolio Personal.

The dollar-denominated Boden 2012 climbed 0.37% in price terms to ARS268.50 ($70.10), trimming the yield to 21.14%.

The Boden 2012 has rebounded sharply in recent months as investor fear of a default faded. Yields rocketed up to over 60% earlier this year, when those fears reached a climax.

On Wednesday, President Cristina Fernandez said the government was ready to face Monday's Boden payment and the rest of the bond payments due through her first presidential term.

"We have an economic framework to be able to meet our commitments as indeed we do for our commitments in 2010 and 2011," Fernandez said.

However, the government's debt stands at 47.6% of gross domestic product, and growth prospects have dimmed considerably.

"There is a need to reposition ourselves in a world that is absolutely different" from the world of 2007 and 2008, Fernandez said.

"This year we're going to grow but it's obvious that we're going to grow far less and therefore we're going to have less revenue than we had in previous years," she said.

That slowdown has led some analysts to question the government's ability to continue a significant spending program and meet all its debt payments.

The benchmark peso-denominated bond slipped 0.29% in price terms to ARS87.25, bringing the yield 13.36%.

Meanwhile, stocks got a lift from the good mood on Wall Street following a less-than-expected drop in second quarter GDP growth in the U.S. GDP in the U.S. fell 1% in the second quarter, smaller than the 1.5% drop economists were expecting.

Local shares also found support in higher international oil prices due to a falling dollar. Argentina's Merval Index is dominated by company's tied to the sector.

The Merval Index rose 1.39% to close at 1,719.87 points. The index was up 8.3% in the month of July and is up 59% since the beginning of the year.

The peso was unchanged at 3.83 to the dollar.