It launched the second placement in May with an offer of nine financial instruments, almost all tied to inflation and the dollar. In the market it is estimated that the commitments will be covered.
The Ministry of Economy will try this Monday to close the funding for May by bidding for a menu of Treasury securities, made up mostly of indexed instruments and with the open option to place debt for 2024 and 2025. According to market sourcesit is estimated that it will not have major inconveniences in being able to cover maturities and add net funding.
First of all, will make available to the Common Investment Funds (FCI) a Letter of Liquidity (LELITE) at the June 16 dating a rate of 142% annual effective. The rest of the instruments will determine the rate in the tender. As in the first call, the Ministry of Finance decided not to include the LEDES, which are usually a reference for the Central Bank’s monetary policy corridor.
Among the instruments that make up the Market Makers Program, there will be titles tied to inflation: Treasury Bonds adjustable by CER (BONCER) will be offered on August 13, three Bills adjustable by CER (LECER) on August 13, September 18 and November 23. In addition, there will be a Letter linked to the official dollar (LELINK) as of October 31. These instruments will be available in a second round on Tuesday for the entities that participate in the program.
Meanwhile, among the bonds that are not part of the Market Makers program, Economy once again appeals to banks to stretch maturities beyond the three month horizon. Thus, it offers two dollar-linked bonds, as of April 30, 2024 and September 30, 2024, and a CER-adjustable bond (BONCER) as of June 18, 2025. The latter offers financial institutions the possibility of setting up reserve requirements of deposits.
According to the consulting firm LCG regarding the values in secondary markets, LECER and BONCER “exhibit a positive internal rate of return of around 9%”. In the case of the shortest bills (with maturity between June and September), “they are listed at par, while for securities with a maturity of 2024 the premium amounts to +15%.”
Economy will have to cover maturities for close to $447,000 million, mainly due to the closure of an LEDE. In the previous call, Economy had to face commitments for $589,000 million and obtained a net funding of $180,000 million with a similar menu.
For that reason, in the market it is estimated that for the second call the Palacio de Hacienda will not have major problems to achieve a similar result. Above all because there is an active participation of the Central Bank, sustaining liquidity for the State agencies that participate in the tenders.
The Central Bank has been buying titles from organizations such as the ANSES Sustainability Guarantee Fund so that it, in turn, can take part in the primary tenders. It is estimated that slightly more than half of the participation is linked to state agencies or banks.
As the Minister of Economy, Sergio Massa, repeatedly pointed out, in the remainder of the year most of the maturities are intra-state, so there will be no major problems to refinance. In June, the total maturities amounted to $1.1 trillion. A Lecer for $502,000 million nominal value, a dual bond for $276,000 million or an LEDE for $322,000 million stand out.
Source: Ambito
