The Ministry of the Economy formalized this afternoon the request to exchange debt in pesos maturing in the second quarter of 2023 for two baskets of bonds, one including exclusively inflation-adjusted securities (CERs) and another with a mix of 70% CER-adjusted and 30% dual bonds -adjusted for inflation or the exchange rate-, with maturities in 2024 and 2025.
In total, the exchange will cover bonds for about seven billion pesos divided equally between public entities and private entities, mainly banks, although there are also other institutional investors such as investment funds and insurance companies, according to sources at the Palacio de Hacienda. LThe tender will open on Thursday 9 March and the operation will close on Monday 13 March.
Titles eligible for the conversion offer will be: BONCER TX23, LEDES S31M3, S28A3, S31Y3 and S30J3, LECER X21A3, X19Y3 and X16J3, BONO DOLLAR LINKED TV23 and BONO DUAL TDJ23.
The first of the baskets will include the exchange of securities for CER bonds, with maturities in April 2024 (30%), October 2024 (40%) and February 2025 (30%); while the second basket includes a dual bond maturing February 2024 (30%) and two CER bonds maturing October 2024 (40%) and February 2025 (30%).
The government’s goal is to allow the exchange reduce the risks represented by the “towers” of maturities in the months of April, May and June -for more than 2 billion dollars a month-, and to clarify the financial uncertainty that was generated before each tender, the sources assured.
Even if the idea is that they adhere to as many securities as possible, given the expiration date of the new securities (2024 and 205) and the need for liquidity of both state entities and companiesfrom Economy they discount that 100% adherence will not be achieved and, instead, they said that it could be considered a “successful” operation if a large part of the public sector and “between 45 and 50% of the banks” participated.
“Our goal is to move towards a reorganization of the maturity curve, so that the banks have short, medium and long-term returns,” they said at the Palacio de Hacienda.
In this sense, it is assumed that the banks will enter with the highest share of securities to be exchanged between private individuals, as neither investment funds nor insurers usually seek cover in securities with maturities longer than one year.
Even so, at the Palacio de Hacienda they are scheduling meetings with the funds and insurers, so they can join the exchange, while work is done towards a reopening of the exchange which took place in December last year -to which nearly $3 billion entered- so to be incorporated part of the securities that expire in March, for approx 800,000 million dollars.
This afternoon the Minister of the Economy, Sergio Massa, met with the main executives of national and international capital banks.
He was accompanied by members of his cabinet and the president of the Central Bank (BCRA), Miguel Pesce.
In this context, the minister stressed that The exchange “breaks with the idea that Argentina is at the door of a debt reprofiling every week, all those ghosts are cleared up. Let’s defuse the idea of the bomb, that every two or three months something is about to explode”.
As expressed by Massa, the initiative will give the debt market in pesos “a 2024, 2025 maturity curve, much more orderly, also associated with the fiscal order program”.
AQ
Source: Clarin
