The government had to raise rates again to obtain the necessary financing to roll over the debt in pesos. In this Friday’s operation they got 332,000 million dollars47,000 million more than the amount due this week.
“Today, 283 billion pesos were owed. We had offers for almost 600 billion. We will accept 330 billion,” finance secretary Eduardo Setti tweeted in the mid-afternoon.
“We want to thank the strong market support in this new tender for public sector funding,” the official remarked.
Setti avoided mentioning what rate they needed to capture to gain market support. Private sector calculations put it at 119.5%, a point and a half above the last placement.
The economist Salvador Vitelli underlined that for the Lede of May 2023 and June 2023 an effective annual rate (TEA) of 119% and 119.5% was paid.
“They paid 118.3% of the 96-day TEA in the LEDES, Keep increasing the rate little by little. What they left out is because it was even more expensive. Enough CER even at a slightly lower rate than the last one. And absolutely everything expires before STEP,” said economist Gabriel Caamaño, of the consultancy Ledesma.
In addition to the high rate, the other noteworthy element is that the market accepts only short-term loans and having as its maximum duration the elections of the year.
“Still, the tender extended the deadlines between March and July, without offering titles for the post-election period“, indicated by the consultancy Adcap.
From the Palacio de Hacienda it has been reported that so far this year positive net financing of $389,954 millionwhich implies a rollover rate of 138%.
Despite the high refinancing rate, debt in pesos continues to pose a challenge to the government. This year alone, the Central Bank has to rollover an 11 billion dollar stock of Leliq. Debt interest payments required $1,463 million in January alone.
On the Treasury placements front, it has emerged in recent days that Sergio Massa is negotiating with local banks a stock exchange
With the elections upon us, banks are no longer satisfied with high rates, but also want guarantees they will not be prisoners of compulsive restructuring after the election.
For this it emerged that they would negotiate a “buy back guarantee” of these titles in the event that the next administration opts for a new re-profiling.
In this tender, the menu of offered tools consisted of five titlesof which one LELITE expiring on March 27, 2023, exclusively for mutual funds.
They have also reopened two letters off (S31Y3 and S30J3) maturing on 31 May and 30 June 2023 respectively and an adjustable bill for CER (X16J3) maturing on 16 June 2023. These instruments are part of the Market Makers programme.
It finally reopened a bond linked to the US dollar (T2V3) expiring on 31 July 2023.
In the race they were received 1,928 bidsrepresenting a total bid of 597,224 million dollars of which a total of 361,513 million dollars, which represents a cash value of $332.400 million.
Of the total funding obtained, 70% is represented by fixed rate instruments19% to CER-corrected instruments and the remaining 11% to exchange-corrected instruments
As part of the Market Maker Program, Round Two will take place next Monday, where bids up to 20% of the total face value may be received and awarded awarded in the tender this Friday.
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Source: Clarin
