Despite the criticism of Together for Change to debt exchange in pesos announced by Sergio Massa, the financial market came out to give it its support depending on the complicated situation that arose for the second quarter of the year. Even so, from the Ministry of Economy itself it is estimated that the level of income in the voluntary operation will be more limited than in previous exchanges.
According to a senior official Ambit, The difference on this occasion is that “a rearrangement of the curve” of the terms and interest paid by the bonds in pesos is sought. The exchanges that were formulated last year only aimed at “kicking” maturities for a few months based on market demand for profitability in an inflationary context. That in turn generated short-term bonds yield more than long-term bonds, something that under normal conditions should be the other way around.
According to estimates by the consultancy 1816, between March and June of this year, debt maturities in pesos reached $7.7 trillion. One of the points that the market will be watching is the progression of new maturities between 2024 and 2025. In August of last year, in a similar exchange, adherence was 85%, while in November it had fallen to 61% of the total holders. In principle, the majority had been intra-state. The bulk of the private sector was left out.
The Government will deliver inflation-adjusted and dual bonds (indexed by inflation or by the dollar, whichever has risen the most) and the BCRA will have the commitment to buy the titles in case they decide to sell due to a sharp drop in price, for example.
AboutWalter Morales, CEO of Wise Capital, considered that the proposal of the debt exchange that the Government is launching is correctgiven the accumulation of maturities that there is this year prior to the elections. “It is the same exchange that they have been doing every three months, to which they are changing the format”pointed out Morales, who warned that the market, until now, has only been lending to the Government in the short term.
According to pointed out Martín Rapetti, head of the consulting firm Equilibra, the operation “is fine”, while he considers that “there is nothing new regarding what was being done.” The economist points out that The operation called “put”, which is a “liquidity insurance” offered by the Central, “was already done last year when the debt market collapsed.” Unlike the economists from Together for Change, Rapetti said he did not see “a very burdensome commitment for the administration.” “The truth is that we It’s hard for us to see a bomb,” he explained.
By your side, Aldo Abram, executive director of the Libertad y Progreso Foundation, spoke out in favor of the operation. “If they manage to redeem the debt, unless they do so at too high a cost, it will always be good news.”Abram noted. The economist said that “there are many people who are betting that there will be a change in management in the next government and that for this reason there are more chances that things will happen in favor of ordering the accounts.”
Abram acknowledged that the operation “is going to leave an issue for the next administration to resolve,” although he considered that if that government puts a package of measures on the table immediately, “It will not have problems refinancing” the debt in 2024 and 2025. Above all, in the second year of the next government there are the heaviest maturities of the debt in dollars from abroad, and from the International Monetary Fund. Argentina will need to return to international voluntary markets and almost possibly go out to offer another new voluntary exchange in dollars. In the same way, the debt in pesos would follow the same path at that moment.
Guido Sandleris, former president of the Central Bank during the management of Mauricio Macri, once again raised his objections to the operation. He, at least, raises his suspicions that the government can take advantage of the new, more relaxed context of maturities to abandon the path of fiscal order. He considered that the exchange “It is an indication of a new plan platita” in the election year.
Source: Ambito
