The Minister of Economy, Sergio Massaachieved this Tuesday, January 3, a 67% adherence to the voluntary exchange of debt in pesos, and obtained decompress maturities of the first quarter of the year for $3 trillion.
Thus, the Government exchanged 8 debt titles that expired between January and March. Tobias Pejkovich, Economisa of Facimex Valores, indicated that the conversion operation made it possible to go from maturities that existed in the first quarter for $4.3 trillion to an amount of $1.4 trillion.
In the market, they anticipate that the Ministry of Finance this year will carry out several debt conversion swaps given the bulky load of commitments for 2023 that are around $12.4 trillion.
This is the third debt swap carried out under Massa’s management in the economic portfolio, the first took place on August 9, 2022, a few days after he took office, and the second took place on November 10.
Analysts explain thatThis swap is also aimed at making it easier for the Central Bank to roll over the bonds it has been buying in recent weeks. in a scenario where doubts continue about the debt in pesos, despite the fact that the government managed to close the 2022 financial program.
And it is that, by its organic charter, the monetary entity cannot participate in the Treasury tenders.
In the exchange, one of the baskets offered dual bonds that adjust for inflation or the official exchange rate
Debt swap: what menu did you offer?
Economy offers a more diversified menu than in the two previous exchanges. But just like in both operations again resorted to offering investors Dual bondsamong the options.
The dual bond yields a yield adjusted for inflation or for changes in the official dollar, whichever is higher at the time of maturity.
and there is 8 eligible bonuses included in the exchange: three Ledes with expiration dates on January 31, February 28, and March 31 (S31E3, S28F3 and S31M3), two Lecers that expire on January 20 and February 17 (X20E3 and X17F3), the Bono Badlar TB23, and two Boncers (TC23 and TX23).
Within this framework, the Treasury provided three different alternatives:
- A basket made up of You giveand integrated 25% by one that expires in April of this year (S28A3), 35% with the one that expires in May (S31Y3), and 40% with a new one that expires in June 2023 (S30J3).
- A basket made up of dual bonuses: 35% with the one that expires in July 2023 (TDL23), another 35% with the one that expires in September of this year (TDS23) and another 30% with a dual that expires in February 2024 (TDF24).
- Economy added a third option to those two baskets that were in the original offer of this exchange that had been launched last Thursday. It incorporated a Lecer -the bill that adjusts for inflation- maturing in June (X1673) specifically eligible for the Lecer X20E3 and X17F3 (those that expire on January 20 and February 17, respectively).
Sergio Massa’s debt swap in pesos achieved an adherence of around 67%.
Debt swap: how was the maturity profile?
After the last Treasury debt tender, Economy was able to close the 2022 financial program with net financing of almost $700,000 million. However, only in January maturities already totaled 1.1 trillion.
Due to the large holding of securities held by the BCRA and those held by other public bodies, the market estimated a floor percentage of adherence to the exchange of between 45% and 60%, for which reason they judged that the relevance of the operation it was going to be to see how much was redeemed above that threshold.
In the exchange on Tuesday, 1,079 offers were received, representing a total face value of $1.6 trillion.
The Palacio de Hacienda specified that the The National Treasury had to face maturities of $1.1 trillion in January, $1.2 trillion in February, and $2 trillion in March. After this conversion operation, it managed to reduce the projected maturities to $0.39 trillion to $0.42 trillion , and $0.6 trillion, respectively.
In the economic portfolio, “the participation of banks among those led by Banco Santander and Banco Galicia and, to a lesser extent, Nuevo Banco de Santa Fe, Banco San Juan and Banco Macro” stood out.
The settlement of the conversion operation will be next Friday, January 6. The next debt tender will be held on January 18 as previously reported in the preliminary bidding schedule for the second half of 2022.
Analysts expected a floor adherence to the exchange of between 45 and 60% for participation of the BCRA and public entities
Debt swap: satisfactory result
Salvador Vitelli, specialist in finance and agribusiness, stressed that “adherence was achieved in the order of 67%, which is a successful result by the Treasury given the maturity profile that it was going to have between January-March, having been able to roll that level is good”.
In this sense, the expert considered that “It is a good sign that private banks have participated in the exchange, and I imagine that they turned to basket 1 of fixed rate and with titles that all expire this year and to the public hands making support in the other basket of the duals”.
in tune, Pejkovich remarked that “andThe exchange reached a participation of 67%, above the average adhesion of 56% in the exchanges that were made since 2021″
“It is important to remember that approximately 50% of the eligible instruments were held by public entities. If we assume that the public entities participated with all their holdingsthese numbers suggest that private investors had a support of 34.5%a figure higher than the November swap when private participation had been practically nil,” Pejkovich highlighted.
The economist maintained that “a good part of the maturities of January, February and March is cleared, placing them at more manageable levels at the cost of raising the burden of maturities for the rest of the months of the year.”
The financial analyst Gustavo Ber He also evaluated it as a “satisfactory result, in search of managing short-term maturities, since it exceeds the holding estimates of the public sector.”
Analysts called the result “positive” because it achieved a higher adherence to that which was in the hands of public entities
Sebastian Menescaldidirector of Eco Go agreed that the result is “positive since it postpones a large part of what was coming, and manages to extend maturity, I think that everyone took advantage of the rates that are now on the market, but the challenge remains of what will happen to everything that is private after the elections They didn’t manage to extend that.”
challenging trail
The exchange is carried out in a scenario where the concern about the debt in pesos continues. In this regard, a report from GMA Capital He remarked that “the uncertainty about what may happen beyond the next term in terms of managing maturities in pesos makes it impossible for the Treasury to place titles outside of 2023”, and “this is reflected in the forward rates between 2023 and 2024 titles , which have exceeded 2 digits for more than 6 months”.
“This invisible wall means that the only way to stretch maturities is by piling them up in 2023,” he emphasized.
The consultancy maintained that “it is true that approximately 60% of the securities maturing in 2023 are in the hands of public entities, a fact that with customized swaps could decompress the tension”, but “for the private sector, the concentration of maturities in the next year it becomes a risk in itself.”
.In eco go They also stated that, beyond this exchange, “what is clear is that the Treasury continues to face a wall in terms of issuance terms, so in the second and third quarters it will have to find some economic or political mechanism that allows it to extend the deadlines”.
