With everything, to obtain new local debt for 2 points of GDP, it must first renew the bulky annual commitments of more than $5 billion. In the first two months, the net financing obtained by the Ministry of Finance, headed by Rafael Brigo and Ramiro Tosi, was large: it totaled $323,992 million, which is equivalent to a rollover rate of 151%. But in March the amount of maturities becomes more challenging. This month, they expire around $900,000 million, 60% of which is concentrated in the TX22 bond. That is why the scheduled conversion that will take place today is relevant.
Finance designed a menu of instruments seeking to attract private holders of this title to enter the swap. The public sector has about a third of the stock in circulation and its adherence is discounted. In the call to investors, made late on Wednesday, the officials diagrammed the values of the operation in such a way as to offer a “prize” to those who participate with respect to the prices of the secondary market at the close of that wheel.
The holders will be able to choose between two baskets. The first is made up of 30% by a new reading to December; 30% of the Bonzer T2X4, which expires in July 2024; and 40% of Boncer TX26, that expires in November 2026. The second basket is made up of 20% of the T2X4, 40% of TX26 and 40% of Boncer TX28, which expires in September 2028. Like the bond to be delivered, all these titles are indexed. As the prices at which the titles will come out in each basket is different, the highest prize appeared for the longest alternative, with the aim of stimulating an extension of terms. According to calculations by the SBS Group, at Wednesday market prices, the swap offered a reward of 1.3% for option 1 and 2.3% for option 2.
Official sources told Ámbito that the baskets were designed in this way to grant a growing premium per term and to give a positive rate on the instruments since in the secondary market until 2023 the entire CER curve (indexed) operates at a negative real rate. in the face of rising inflation expectations.
All in all, private sources pointed out that a good part of the reward was lost during yesterday’s session as a result of the rise in yields in the secondary market due to the fall in the prices of longer titles, such as T2X4, TX26 and TX28. “Taking today’s prices (for Thursday), there is no premium compared to market prices,” said Nicolás Rivas, BAVSA trader. For this reason, he does not expect a majority participation of private holders: “Perhaps it will help insurers to roll over the maturity and ensure positive real rates in pesos. Yes, there is going to be acceptance of public organizations, which have around a third, and perhaps some of the funds to accompany it”.
The Government is committed to clearing an important percentage in advance. In any case, if this were not the case, there will still be the auction next Wednesday to try to refinance the remainder that remains after the exchange.
Source: Ambito
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