Is a new exchange coming soon?: the Government analyzes an operation for the private sector

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The Government is evaluating the sale of new peso bonds maturing in 2026 to public sector creditors, in a attempt to redeem 4 trillion pesos of debt (19,700 million US dollars) which expire in the second half of this year, according to a senior government official.

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Officials want to sell new bonds maturing in 2026 and 2027, stretching the sovereign debt maturity curve as a way to send a signal to the private sector so that it also extends its deadlines. private investors they have another 2.8 trillion pesos of local debt maturing in the second half.

THE public sector holdings to represent 60% of the debt which matures in the second half of 2023. The new bonds would be inflation-linked or dual, similar to the instruments issued in the last March 9 auction.

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A dual bond is an instrument in which investors receive the higher of the inflation rate or the exchange rate.

An economy ministry spokesman declined to comment.

Argentina has a $74 billion mountain of local debt to manage the largest amounts were concentrated in the months leading up to the presidential elections October. That pile of debt grows almost exponentially because so many of your obligations are linked to inflation above 100%.

The Treasury swapped a total of 4.34 trillion pesos earlier this month for new 2024 and 2025 bonds, easing immediate concerns of a potential local debt default.

However, the country faces private sector maturities of $600 billion in March and about $1 trillion a month between April and June.

The economy ministry could issue a decree to oblige public entities to swap their holdings during the second half of this year. This would allow interest rates to be better accommodated with holders, the official said.

In general, public sector holders should participate in debt refinancing, because they answer to Alberto Fernández.

Source: Clarin

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