With the collaboration of the banks, the Ministry of Finance is playing a new chance this Wednesday to continue passing debt maturities in pesos beyond the horizon of three months. In April it already achieved a good placement by 2024, with dual bonuses, and now will try to stretch until 2025.
It’s about a new bond in pesos that will serve financial entities to establish reserve requirements for savings accounts, current accounts and time deposits. In the market it is understood that this new Treasury financing instrument is part of the permanent conversations that Eduardo Setti maintains with market players.
In this opportunity, aim to renew almost $428,000 million in maturities, of which 92.7% is in the hands of private actors, which is in itself a challenge. The total for May is $1 trillion, but the equivalent of 43% of all that corresponds to private funds expires in the first call.
In the first round, Economy makes available a short-term bonds menu and most with some indexing mechanism. For Mutual Investment Funds (FCI) it will make available a LELITE maturing on June 16. On the other hand, within the Market Makers Program, two LECERs are offered, one on September 18 and another on October 18; a BONCER to August 13; and a Letter linked to the official dollar, as of October 31. I also know will seek to continue extending deadlines, as was done in April. Among the instruments that are not included in the Market Makers program, a new dollar linked bond is presented as of September 30, 2024 and, as the main novelty, a bond in pesos is offered, as of August 23, 2025 (BONTE25).
“It strikes us that there are no fixed rate alternatives (LEDEs) for the general market”, indicates the stock company Portfolio Personal Inversiones (PPI) when analyzing the supply component. Probably, the lack of LEDES is due to the fact that it is taken as a reference for the BCRA’s monetary policy. In the secondary markets these securities are traded at a rate of 150% per year.
The Alyc also considers It is unusual that there are no instruments with expiration prior to PASO, which is why he says that “it will be a true litmus test for unregulated private loans with short maturities”.
“Also, this new BONTE25 It is not just any instrument. Its settlement differs from the rest of the titles, coinciding with the payment of coupons for TY27 and TB27 for around $148,350 million”, explains PPI. In this sense, he states that the suspicion is that “this new instrument was discussed with the banking system to apply those pesos”.
Ignacio Morales, a financial analyst at Wise Capital, noted that “The offer is in accordance with what the market is asking for: indexed to inflation or official dollar in the short term (except for the linked dollar bond maturing on September 30, 2024)”. “The 2025 bond is for banks to integrate reserve requirements. We believe that the tender will be successfulsimply due to the fact that we assume that a large part of the net financing comes from the BCRA, which buys securities from public entities so that they have fresh funds to enter the tender,” Morales said.
It is a consensus in the market that the public sector is going to go out again to complete the demand for bills to cover the net financing, just like what happened in April. So, almost 50% of what the Treasury managed to place came from public agencies, which in turn are being supported with liquidity provided by the Central Bank. The entity led by Miguel Pesce continues to buy bonds from state agencies, so that they can enter the bidding with the pesos.
Regarding fees, Federico Moll, from Ecolatina, told Ámbito that “The Treasury is going to have to validate higher rates.” “Today we are not seeing such a strong expansion in the supply of pesos, but rather a drop in demand, and this drop refers to expectations regarding monetary policy that are quite complex. They are going to have to raise the rate and that can be counterproductive,” he said.