Despite the fact that in the Palacio de Hacienda they boasted having converted the wall of debt maturities in pesos into a valleyfor private analysts, the result of the exchange was “very poor” and it was far from expected.
With trading open on Thursday, the Government managed to kick off short-term 2024 and 2025 maturities for $4.3 trillion. The reading made by the Ministry of the Economy is that acceptance was 64%, while market expectations marked a floor of 70%.
But strictly speaking, to reach that percentage, Sergio Massa’s team entered a debt that had already been exchanged last January. So, aDoing the numbers right, the actual acceptance was 57%.
“The debt conversion data reported by the Ministry of Economy was misleading at best. The debt conversion was not 64% but 57%. The cost was very high, with very positive real rates. And the level of private membership was low, around 23%. Very poor”, indicated by Aurum Valores.
For personal portfolio investment (PPI), “at a glance the result is not very encouragingespecially in light of the estimates that indicated a private holding company which in some cases reached almost half of the stock”.
For Adcap Grupo Financiero, the exchange “implied an acceptance of only 17% of private holdersS. There are still 3.2 trillion pesos outstanding with maturities through June 2023. Acceptance has been particularly low for bonds maturing in March, at only 20 percent.”
Analysts point out that private investors let the exchange roll because they prefer to stay in short-term bonds in the face of uncertainty. And this despite the fact that the government has introduced various stimuli to seduce the banks, such as the PUT which guarantees them that the Central Bank will buy those bonds when they want to leave and at the same time promising to pay them the most profitable option between the evolution of the inflation and the official dollar.
The consultancy firm Equilibra estimates that 21% of the securities to be traded were in the hands of private banks, while another 24% were held by public banks and 25% corresponded to the public sector. “The remaining 30% were held by private sector non-bank agents, with the hardest part to roll over.” And they calculate that the Finance has validated a rate slightly above 10%, in line with the market.
Fernando Marull scores that exchange”It was worse than initially imagined, with banks not even participating.”. It details that the new bonds for 2024/2025 came out at CER +11%, almost what they yielded on the market. “Specifically, the private sector, which are the important maturities, has almost not gone on the stock market and the Ministry of the Economy will continue to bid because they keep maturing almost $1 trillion average through June“.
Despite official optimism, the peso debt issue has not been resolved. Cohen points out that these maturities remain ahead of technical values for the next four months: $533,000 million in March, $1,018,000 million in April, $797,000 million in May and $793,000 million in June.
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Source: Clarin
