Exactly two months ago, the January 18, Economy Minister Sergio Massa came up with what was then called “another bunny” of the galley: the repurchase of debt securities. It was said that this move would lead to an improvement in country risk and consequently a way to bring Argentine companies closer to the global credit market.
Today it can already be said that the operation resulted in a complete failure. The bonds are worth between 15 and 20% less than the price Economy pays today. And the country risk, which was at 1,881 points, closed on Friday at 2,383 points. Since it is not clear how much of the billion dollars allocated for the operation was actually used, it is difficult to calculate how much this martingale cost.
The game was so bad that even the IMF asked that it not be pressed. A fancy way of saying that the few dollars the government has today won’t go to waste.
The failure of the operation is already clear. What is not yet reliably known is whether, in addition, someone had privileged information to take advantage of the ferment of those days and translated that into a profit of extra cash.
It is known that Massa ordered the National Securities Commission to open a file to investigate malicious maneuvers. Until this Friday, according to what they said clarion sources who closely follow the case, the investigation – which is secret – continued by collecting the statements of the main ALYC (Stock Exchange Operators) so that they could show them the movements of their 100 most active and bulky accounts. The first conclusion is that ALYCs managed bonds in those days own accounts and funds.
Regarding the significant increase in volume, the registrants stressed that it explains why the possibility of arbitrate between two prices of the same product (the GD35 bond) which had distanced themselves, according to local and foreign prices and according to the settlement term -immediate or 48 hours-.
This led to do quick wins. Which justified, in the eyes of market experts, for many people to borrow money…Attention– to exploit operations and consequently multiply profits. The sureties were in pesos and dollars, but at very high rates compared to previous days. But since the debt was assumed in a single day, the cost paid for that debt was secondary, as the possible profit justified it.
In the coming days, the CNV will summon the current account holders inactive for the previous 90 days to the events investigated, and which subsequently fell silent. Maybe some valuable information will be taken from there.
The movements of accounts which in those days had an unusual volume of operations will also be investigated.
Once the preliminary phase is over, the CNV must draw its own conclusions and submit the file to criminal justice.
The forecasts suggest that no irregularities will be found.
Source: Clarin
