the Treasury closes November without adding net financing

the Treasury closes November without adding net financing

The consulting firm Portfolio Personal Inversiones (PPI) indicated that “the Finance team exhibited the worst tender since April 12.” “Beyond the fact that the second round is still missing, the Treasury is ending the month with a negative result ($9,218 million) for the first time since April,” says PPI according to its own estimates.

The menu of instruments offered consisted of a LELITE (exclusively for Mutual Investment Funds) maturing on December 16, 2022 and four reopenings: two LEDES maturing in March and April 2023 and two linked dollar bonds maturing in April and July 2023. 75% was represented by fixed rate instruments and the remaining 25% by instruments indexed to the official exchange rate.

PPI indicated that “The Treasury was generous with placement rates, especially in dollar linked ones”, since “both titles were placed 260 and 115 basis points above the rates they were showing in the secondary market before the announcement of the conditions.” Secondly, the Ledes rates were 118.3% and 113.3% annual cash for the March and April bills, respectively.

In the market it is suggested that in the last tenders investors were already showing signs of saturation and a less willingness to refinance maturities. Getting net financing now seems further out of the question.

It must be taken into account that for this operation the Ministry of Economy had asked some provinces to participate in the 120-day Bill that expires in April, They pay a better rate than bank fixed terms, but apparently there wasn’t much support out there either.

The financial program, strictly speaking, already looks very challenging. Beyond the debt maturities that lie ahead, the Economy has to raise funds to cover the fiscal deficit. Before the Dólar Soja II program was implemented, it was estimated that it lacked between $430,000 and $500,000 million. But now it is expected that a part of it will be covered with the proceeds of export withholdings.

But still everything looks uphill. On December 14, the penultimate bidding of the year will take place, which according to private estimates is equivalent to 99% of what remains to be done in the year and is $405,638 million.

In the market it is speculated then that the ball of greater issuance of pesos that the Central Bank will make to buy the currencies of the soybean dollar II can be turned to the risk of the Treasury and the BCRA. The higher collection from withholdings will take some of the pressure off net financing needs.

Meanwhile, Economy indicated that within the framework of the Market Makers Program this Tuesday the Second Round will be held where “Bids may be received and awarded for up to 20% of the total face value awarded in today’s tender.”

Source: Ambito

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