With a tight timetable of deadlines, both in pesos and dollars, the government will face the first big disbursement of the year: you have to pay them about US$1,035 million to bondholders who entered Martín Guzmán’s latest debt conversion in 2020. In the market, dollar bond prices have prepaid: last week they climbed to 7%.
This is the semi-annual payment of the obligations arising from the debt restructuring in 2020. It is estimated that $680 million is for foreign law obligations Y $355 million for local law obligations.
The coupon cut corresponding to this semi-annual payment was made last Wednesday. In other words, since last Thursday the operators who choose these securities have no longer had the carrot to pay interest upfront.
“The interesting thing is that these bonds were issued with very low couponsbut the low parity and the “step-up” coupon scheme means that it currently has average annual current coupons of 6.5% with a maximum of 11% for the series maturing in 2038 and 2041″ , said Massimiliano Donzelli, of Investire in linea.
The wait for the payment of these interests, added to an incipient “electoral exchange”, or rather the bet of some investors on a change of government for December of this year he backed dollar sovereign debt in the last weeks. In fact, since their lows in July of last year, stocks have rebounded more than 40%.
In this context there is already country risk, measured by the JP Morgan bank improves by more than 5% since the end of 2022: on Friday it managed to break through the floor of 2,100 units, to close at about 2,094 points.
This twist adds to thes 1,280 million dollars that the government must pay this Monday to the IMF, as the first repayment of the loan. In total, about $2.3 billion would leave the central bank’s coffers in a single day to meet these two obligations. The announcement of the special activation of the currency swap with China was made on Sunday It comes at the right time to give air to the monetary authority.
Unsurprisingly faced with this deadline, both abroad and in Argentina, several financial analysts are encouraged to take a better look at the country’s sovereign debt this year. Is that, despite the price recovery, these dollarized stocks are still very low levels, which could be a good entry point for more profits this year.
In a report for its clients, Swiss bank UBS highlighted that Argentine stocks currently have a “interesting risk profile” advantage due “to its depressed valuations, low sensitivity to global macroeconomic indicators (drivers) such as the US monetary rate, and a positive correlation with commodity prices”.
At the same time in the local PPI have warned that even if this year there will be a change of administration. The market expects that whoever succeeds Alberto Fernández in government will face a new debt restructuring, with a view to accumulating maturities in dollars from 2025.
“Between 2025/2035 the Treasury will need a US$11.8 billion annual average for the payment of principal and interest on all restructured debt in 2020″, explained their analysts in a report for their clients, in which they underlined that, in the medium term, “if the restructuring scenario is less aggressive than which is the price discount, the bonds will have a very attractive upside”.
Source: Clarin
