During the presentation of the agreement, the minister Sergio Massa considered that “for many months It was raised as the biggest problem and the biggest uncertainty of the Argentine economy, which were the maturities of the debt in pesos, to have a program and a programming that gives peace of mind to the saver, to the depositor in the first place”.
The titles under the conversion offer will be: BONCER TX23, LEDES S31M3, S28A3, S31Y3 and S30J3, LECER X21A3, X19Y3 and X16J3, LINKED TV23 DOLLAR BONUS and TDJ23 DUAL BONUS.
Two baskets of instruments are offered:
- A) 30% New CER Bond with maturity. April 2024, 40% New CER Bond maturing. October 2024 and 30% of the New CER Bond with maturity. February 2025;
- B) 30% Dual Bonus with maturity. February 2024 (reopening), 40% of New CER Bond with maturity. October 2024 and 30% of the New CER Bond with maturity. February 2025.
One will only have titles indexed to inflation, while another will also contain “dual” instruments that also protect against a possible devaluation, according to official sources.
Banks will be offered two baskets. One will only have inflation-indexed securities, while another will also contain “dual” instruments that also protect against eventual devaluation, According to official sources.
The intention of the authorities, as it transpired, is that private banks participate with 45 to 50% of their holdings of titles (in a similar proportion would the public sector” with the idea of achieving “a strengthened maturity curve in the medium and long term”.
For this, different titles will be offered. Also, it was indicated that “There will be no differences between the offer for the public and private sectors.” Although they recognize that “In the future, with a greater rearrangement, think of an alternative.”
“It is not an exchange like the usual, short-term”, they indicated. “They are trying to normalize the curve, so that banks have short, medium and long maturities”
In this sense, at the Palacio de Hacienda they acknowledge that they expect “different levels of acceptance” since it is logical that “banks do not have a single long-term profile”.
One of the objectives that Sergio Massa himself remarked is that it seeks to give greater “predictability and debt sustainability”
critics
In Economy they reject the criticisms of sectors of the opposition that affirm that this exchange “could imply emission risk”.
They reject the ghosts of reprofiling “unless someone wants to do it as an instrument of economic policy”, slide close to Sergio Massa.
At the same time, they question that in some sectors of politics “default is thought of as an instrument of economic policy” and clarify that in Economics “We don’t think this way.”
Furthermore, they believe that“No government wants to start its management with a reprofiling.” On the contrary, “It is not convenient for anyone to reshape the debt”
They also clarifiedthat this exchange is not “requires IMF approval” and, on the contrary, the authorities of the organization They maintain that “the ordering of the debt is not frowned upon”
It was also learned that The Central Bank will be in charge of defining the conditions of the “put”, that is to say, the possibility of the entities to sell the titles to the monetary authority at a certain moment.
In the opinion of the authorities, the Put is a liquidity instrument that the banks requested given the “risk associated with political instability” and, to some “few happy announcements from the opposition”. They explain that “risk and high rates are associated with political risk.”
The Ministry of Economy will also hold meetings with insurance companies and mutual funds to reformulate the maturities of the titles held by these entities.
As Massa stated, in the meeting he had with sectors of the bank “The most relevant data of this tender that is being launched, of this so-called voluntary exchange, is that it breaks with the idea that Argentina has a debt reprofiling every week at the door”.
In addition, he stressed that “an offer of two baskets was raised, such as the possibility of having a debt program that even deactivates that idea of the bomb, that every two or three months something is about to explode and that gives it a curve due 2024, 2025, much more orderly, also associated with the fiscal order program.
In this sense, Massa recalled that “We already had a reprofiling of the debt in pesos at some point, We have seen the frustration, pain and failure that this meant for Argentina and we understand that having an orderly, predictable debt profile is enormous peace of mind for the fundamental financial system and for savers and citizens”.
Fiscal
The minister also ratified the decision to move forward on a path of fiscal consolidation. He held that “The challenge of lowering public spending on our part decompresses the idea of having to search permanently for financing or seeking transitory advances from the Central Bank to put the economy in the idea that fiscal order is the most important anchor we have to When it comes to managing the national public sector, it is a task that we have to go through together”.
From this perspective, Massa affirmed that “inflation is fought with a fiscal order, with the accumulation of reserves, but also with control of circulating money”.
With this intention, he anticipated that they will seek to order the intra-public debt since “we have the maturities of the third and fourth quarters that have a lot of weight from the national public sector, which sometimes also messes up and generates uncertainty”.
Finally, he remarked that what now remains is to “carry out the exchange, the bidding and on Monday of next week show Argentine society that we have a fully strengthened financial system and also the national public sector with its accounts in order”.
Source: Ambito
