This Wednesday, in the midst of market uncertainty due to the exchange of dollar bonds for peso bonds ordered by public organizations, the government closed a new peso debt tender, where it raised 416,500 million dollars and the achievement has renewed 113% of this week’s deadlines.
To get banks to provide peso financing, the economic team raised the tax rate to 123% per annum.
In this way the Treasury received 1,643 offers. “We were owed $367,000 million in national Treasury debt, we had offers for $664,000 million in face value and we accepted $416,500 million,” Finance Secretary Eduardo Setti anticipated via Twitter.
“We want to thank the institutions of the Argentine financial system and the people who believed in our proposal,” said Setti.
Neither Setti’s post nor the official statement mentions the rate. However, analysts warn that they have offered a high rate to close the deal.
“The Treasury is already paying a 123% annual percentage rate (TEA) to fund them for 95 days,” emphasized the economist Gabriel Caamaño.
This Wednesday’s auction was the first after the debt exchange in pesos that Minister Sergio Massa proposed two weeks ago and which was less well received than market expectations.
And furthermore, this operation coincided with a day of turbulence in the midst of the announcement that the Government will oblige the ANSeS Sustainability Guarantee Fund and the rest of the public entities to they exchange their dollar bonds for peso bonds.
So far this year, positive net funding of 452,013 million dollars. In this tender, the menu of tools on offer consisted of seven titles. For mutual funds, a LELITE was issued with a maturity date of 21 April 2023.
Two new bills were also issued: one rectifiable by CER (X18L3) with maturity on 18 July and one at a discount (S31L3) with maturity on 31 July 2023.
In addition, a discount bill (S30J3) maturing on 30 June and an CER-adjustable bill (X18S3) maturing on 18 September 2023 were reopened. These instruments are part of the Market Makers Programme.
Finally, there was the reopening of a dual currency bond (TDF24) with a maturity of February 28, 2024 and a dollar-linked bond (TV24D) with a maturity of April 30, 2024.
Of the total loans obtained, 43% consisted of instruments indexed to the CER, 32% at a fixed rate, 22% at a double rate and the remaining 3% adjusted to the official exchange rate. Furthermore, 74% corresponded to instruments maturing in 2023while the remaining 26% expire in 2024.
As part of the Market Maker Program, the second round of auctions will take place this Thursday, during which bids of up to 20% of the total nominal value awarded in today’s auction may be received and awarded.
The next race will take place Wednesday 29 Marchas already reported in the preliminary tender program for the first half of 2023.
With today’s result, the Treasury will have to cover just under $300 billion in maturities in the last tranche of the month.
Charles Arterburn is a seasoned business journalist for News Rebeat, where he provides comprehensive coverage of the latest trends and developments in the world of finance and economics.