The Association of Argentine Banks (ADEBA) has denied the statements of the economists of Juntos por el Cambio (JxC) on the debt conversion proposal of the Minister of Economy, Sergio Massa. Its owner Javier Bolzico also defended the initiative.
The government is about to shut down a new exchange of debts in pesos with the banks and the public sector. Finance Secretary Eduardo Setti will meet financial institutions and insurance companies this Monday at noon. The meeting in which Minister Sergio Massa would participate will be to close the operation with which we try to reset the deadlines prior to the STEP and to postpone them to 2024 and 2025, during the next administration.
While the last details of the agreement were being prepared at the Palacio de Hacienda, Juntos por el Cambio broke out on Sunday afternoon with a statement entitled “A new maneuver by the Ministry of the Economy will only lead to greater instability”, as a sign of refusal of the exchange. The message surprised the masses, who interpreted the questions as an attempt to generate a debt “default” in pesos, as happened in 2019.
The president of ADEBA defended the initiative and separated the entities from the accusations of the former finance minister, Hernán Lacunza, who maintained the same position as the economists Guido Sandleris and Luciano Laspina, on a proposal from the government.
Lacunza posted on his Twitter account that “The Government prepares a debt swap with the banks” and who interprets it as “a cowardly and ruinous operation for the State”.
That said, Bolzico noted that “The debt swap proposal is for the securities (not the holder).” Also, he pointed out that “Banks have a smaller percentage of total debt. Therefore to say that he is ‘with the banks’ is -at least- fallacious”.
“A put is an option to sell an asset at a pre-determined fixed price”added the president of ADEBA.
“Up to now, the Central Bank has never bought securities at a price other than the market price. It is a conceptual error to call the liquidity option of selling bonds to the central bank Put,” he added.
“Forex insurance has nothing to do with the currency in which a security is paid. Double bonds can be considered a dollar debt in certain scenarios. Most of Argentina’s debt is denominated in dollars,” he concluded.
How the debt conversion is outlined by the Government
The government is preparing a debt-to-peso swap that could include a basket of eligible securities worth around $7.5 trillion.
This Monday, Minister Sergio Massa and officials from the Ministry of Economy will hold a series of meetings with banks, insurance companies and mutual funds (FCI). The goal is to reach agreements in which engage in those sectors to enter the operationa way to clear the horizon in view of the large number of maturities that lie ahead until the end of the year.
The idea is to postpone the exchange to the first years of the next mandate a considerable part of the payments, so that it takes place after the 2023 elections. In principle, The proposed idea for the deadlines would be between 2024 and 2025.
As reported, debt holders will be offered CER (inflation) adjusted or dual bonds, which can pay the cheapest index between prices and the evolution of the official dollar.
NS
Source: Clarin
