The debt in pesos has become one of the main topics priority from Sergio Massa’s diary. The economy minister knows that the months leading up to the elections will be crucial. This is revealed by the meetings that his team held with public and private banks. The contacts, although frequent, took place before the bond exchange called for this Tuesday, with which the Ministry of the Economy seeks to eliminate the accumulation of maturities in the first quarter of the year.
“Occasionally we have meetings scheduled with a particular entity, nothing out of the ordinary,” confirmed in Economics. In the private sphere, meanwhile, they ensure that at least two private banks have been “collaborative” in the “hand in hand” meetings. “This helps because it is in our interest that nothing blows up and they see Massa’s team taking pragmatic measures within the critical situation they have received,” a source explained.
According to official datathe Treasury faces payments of $4.2 trillion in the first three months. Half of these securities are in the hands of public bodies, mainly the Central Bank, while the rest is placed in the private sector. The idea is to redeem up to 65%but the market closely follows the level of private participation, key to measuring the Treasury’s ability to finance itself without depending on public funds.
Since his landing, Massa made an initial trade in August for $2 billion with an 85% membership and a second one in November for $930,000 at 61% interest.. The goal now is defer $2.7 billion through the eight-stock offeringincluding one basket for private individuals (three fixed-rate bills maturing in April, May and June) and another for the public (three dual bonds until July and September 2023 and February 2024).
“Treasury launches third swap since August with a more diversified menu, which allows you to bet on LEDES shorts which were in great demand in the last race, as well as dual bonds, which offer coverage against the devaluation of the official exchange rate and inflation. We exclude the participation of the Central Bank, official entities and public banks, which sets an acceptance limit above 50%,” said Delphos.
The government ended December with $700 billion in extra funding. For analysts, however, the situation continues to be worrying due to the concentration of maturities exceeding 12.4 trillion dollars in 2023. The idea in Economy is to postpone payments from the first quarter to the second and third, because otherwise it will have to disburse more than $1 trillion per month through September with peaks of more than $2 trillion in March and July.
The trades with private individuals would have served to embed two inflation-adjusted bills (CERs) on the exchange this Monday through June this year, although the bulk of the conversion would be aimed at rolling over bonds held by the central bank. From June, the agency went out to buy them to contain the outflow of private funds. Not being able to participate in the primary auctions, the swap is the way in which the Treasury has at its disposal to refinance its debt with the BCRA.
In parallel, the economy raised rates from 5.9% per month (98% per year) in August. Last week, it placed $326 billion at fixed rates around 6.4% a month (110% a year) in the case of discounted coupons (Lede), below October and November, but above inflation expected in December. This drop in rates, motivated by the price slowdown, may now be insufficient to attract private investors.
“Here we need to stretch, I don’t think the market will stretch at the same rate”they said in a bank. «Another stock exchange intended for the public, where it is seen that those investments are being refinanced. The latest exchange differed from the first in Massa, which had more incentives for private investors and there were better expectations. With the nominal down and the rate at these levels, the hedge loses some of its appeal,” said Lucio Garay Méndez, of EcoGo.
NS
Source: Clarin
