In a context agitated by clashes with the opposition over the legacy that the current administration will leave and by the increase in inflation in January, the government will face the first debt tender of February this Wednesday. Sergio Massa’s team will try to place a floor of 180,000 million dollars and with these funds cover the week’s debt payments of approximately $300,000 million according to private calculations.
The Ministry of the Economy will offer bonds with a maturity for the majority not exceeding PASO (Lelites at the end of February, Ledes in May and Leceres in June) and which, except for a bond to 2027 intended for banks, reflects the difficulties rolling over debt after the elections. The discussion of his sustainability returned to center stage last week with accusations from the opposition that the Frente de Todos would leave a bombshell for the next government.
The darts of Together for Change (JXC) aimed at the increase in debt and the financial crisis that unleashed in June last year, which forced the Central Bank to buy back Treasury bills on the secondary market to curb the outflow of funds and triggered a series of share swaps – the last one dates back to January – to postpone the growing payments in progress, albeit with increasingly shorter times.
For analysts, the market reaction was “calm,” but Monday’s outflow of nearly $40,000 million in immediate liquidity garnered attention. Apparently, some Mutual Funds (MFIs) have switched from bonds issued by Economy to fixed-term or remunerated accounts with banks, which in turn place that surplus in passes or Leliqs of the Central Bank.
The migration occurred a day before INDEC released its 6% inflation rate for January, which represents a 5.1% rate acceleration for December. “What’s new is that money markets were down $38 trillion yesterday, we don’t see much reason for the bailouts to see how they rotate across asset classes in the face of inflation data,” said Paula Gándara, of the manager of the fund Adcap.
The moves could also respond to what many consider a misstep by the central bank. To contain the rise in financial dollars, at the end of January the entity raised the 1-day repurchase agreement rate at the FCI from a nominal 54% per annum to 68.4%. After a few days it should have been lowered to 61.2% due to the decommissioning of 500,000 million dollars that those FCIs had in the banks. In any case, the bailouts shouldn’t represent a risk -they assure the market-, since “everything that unloads at the Central crossing point”.
Regarding this Wednesday’s tender, Aurum estimates that “maturities held by private companies are high and there will certainly be public participation to improve the roll over (a transfer of pesos from the public sector to the private sector would occur which would maintain the upside in private M3 and the pressure would change)”.
“The maturities facing the Treasury this week would total approximately $298,000 million and the Treasury aims to secure a funding floor close to $180,000 million. interest rates above 110% (TEA) in the case of LEDE in May,” says a Delphos report.
Following the latest trade, the Economy will face payments of $420,000 million in February and $600,000 million in March. This is about 14 trillion dollars of public debt in pesos (Treasury) which matures in the very short term in 2023 (especially in September) and is increasingly concentrated, together with another 16 trillion of monetary debt (BCRA), which amount to 30 trillion dollars, according to estimates by Carlos Pérez, an economist at Fundación Capital.
Source: Clarin
