Urgent tender: the Government placed $358,000 million in the local market and reduced maturities this month

The Minister of Economy, Martín Guzmán (Luciano González)

The Government carried out an “intermediate” tender this Wednesday before the end of the month to try to decompress the high volume of debt maturities in pesos that it faced by the end of June, for more than $600,000 million. With this afternoon’s operation, it reduced the payment obligations to $248,000 million.

According to the Ministry of Economy, a total of 143 offers were received in the conversion of securities into pesos. Of that total, 97 corresponded to the Lede for a total of $128,196 million and 46 to the Lecer (tied to inflation for a total of $145.775 million. In terms of cash value, between the two they totaled $357,836 million

“Next Thursday, June 30, the National Treasury had to face maturities for $605,886 million. After this operation, it managed to reduce projected maturities to $248,000 million”, they estimated in the Palacio de Hacienda. “The next tender will take place on Tuesday, June 28, as previously reported in the preliminary tender schedule for the first half of 2022,” they concluded.

To exchange the Ledes that expires on June 30, the Treasury put two different baskets on the table: one that offered securities maturing on October 31 of this year, another on November 30, and a third on December 31. The alternative is a canasta with an instrument on August 31, October 31 and November 30.

In the case of the CER bond, adjusted for inflation, which expires on the same day, the two basket options were: first, an indexed security with expiration on October 21, December 16 and January 20, 2023. As an alternative there will be a group of bonds maturing on August 16, October 21 and December 16. In all cases for this bond, they were also instruments that follow inflation.

on the banks they believe that tensions with CER-adjusted bonds “are calming down”. The official reading is that there was a “dissociated” behavior of the prices of assets in pesos, which required a series of “stabilization” measures, led by purchases by the Central Bank.

Private banks -and in particular those with foreign capital, due to the imposition of the parent companies- would be reluctant to increase their debt holdings in pesos, since in most cases they have already more than doubled their exposure to Treasury debt. in the last two and a half years. Therefore, they fear being exposed to the risk of an eventual restructuring of those bonds, especially after 2023.

In recent days, the head of the Palacio de Hacienda highlighted his “absolute commitment to strengthening the public debt market in pesos that we reconstruct it so that in Argentina there is first more financing capacity of the public sector, and healthier. What has been announced is a set of fully coordinated actions between Economy and the Central Bank so that Argentina has a faster reserve accumulation path.”

On some $11.2 trillion of debt in pesos (14.5% of GDP), the private sector led by banks, insurance companies and investment funds accounts for almost half of the stock, the bulk in inflation-adjusted bonds (CER) .

News in development

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