The economy has exchanged debt for 2 billion pesos: part of the new cards expire after STEP 2023

With a suspenseful ending and strong public sector participation, the Ministry of Economy led by Sergio Massa managed to postpone the deadlines of $ 2 trillion by 2023 and unpack payments until next October. It was through the “super exchange” of bonds that took place this Tuesday and that was the first test of the new management in the face of the uncertainty that exists in the face of a challenging second half.

After Economy has defined that it will no longer finance expenses with Central Bank funds, the debt in pesos has become the main mechanism to cover the red of the public accounts. In this framework, the Treasury completed the exchange and received a total of 1,233 offers, for a total of $ 15,662 million or $ 2 billion, obtaining 85% of the $ 2.5 billion maturing in August, September and October.

Most of the bonds traded were in the hands of public entities – notably the Central Bank – which bought $ 1.2 billion worth of CER bonds and bills since June, when the prices of pesos bonds plummeted due to a crisis of confidence that led, among other things, to the trigger of parallel dollars and the resignation of Martín Guzmán. But there was also the participation, to a lesser extent, of banks, investment funds and insurance companies.

Of course, according to market sources, the Ministry of Finance had to extend the closing of the wheel three times to achieve greater membership. “They did quite well, if we assume that 60% of the stake was public bodies and 40% of the marketalmost half of the market made the trade, it must have been a little less because public entities were buying in the secondary market, but it is a good result, “said one operator.

According to Economy, “after the conversion operation, 85% of adherence to eligible instruments was achieved, in actual value”. For this, the Treasury has offered three dual bonds maturing between June and September 2023linked to the maximum variation between inflation (+ 2%) or the official devaluation, so the investor will receive the best result between the two hedging options in pesos.

This hedging has led banks to “jump headlong” in an environment where inflation is expected to hit 90% per annum and devaluation expectations remain high. The terms of the bonds were also an incentive. “83% of the October maturities were placed in the dual instrument maturing in September 2023. That is, $ 651.862 million was awarded after PASO 2023,” Economy said.

“The banking sector had a clear incentive after the changes that allowed dual bonds not to take a share of the global net foreign exchange position,” said Pedro Siaba Serrate, analyst at PPI. “The double indexation presented by the instruments (both seen as a dollar-linked instrument with a CER option or vice versa) has generated attractiveness for investors willing to refinance their positions in sovereign credit,” he added.

The economy has also reduced the payment ball for the next three months to $ 480,000 million. “The National Treasury was faced with maturities of $ 615.862 million in August, $ 1.123.801 million in September and $ 807.068 million in October. After this conversion, it was able to reduce its expected maturities to $ 115.318 million, respectively. 209.337 million and $ 155.336 million, “he pointed out.

Finally, the government has been better off for the upcoming debt auctions, starting this Thursday. “Thursday is the first tender and with it increases the chances of obtaining the $ 750 trillion in net funding it needs to finance the primary deficit (consistent with the IMF fiscal target) remaining for the year. “said Lucio Garay Méndez, an analyst at EcoGo.