&In the Ministry of Finance they admit that the context for the new debt tender in pesos this Thursday is not the best. With the political background of the primary elections and a currency run in process, the Ministry of Economy has to go out and look for a little more than $700,000 million. The officials who work with Secretary Eduardo Setti have moderate expectations but They understand that the call prior to the PASO will go well.
“We are doing a long-term job and We believe that they will accompany us”, an official source pointed out to Ámbito. They admit, however, that there are political issues that are influencing the markets.
One point to take into account is that if, as reported regarding the agreement with the International Monetary Fund (IMF)Economy has to do without monetary assistance from the Central Bank, so in the next calls it has to seek increase roll over level to make up for the loss of that source of deficit financing. In the year, the accumulated renewal rate of the debt in pesos is 133%.
The most striking thing about the call is that on this occasion Finance left out the offer of exchange-rate-adjustable bonds. It could be interpreted that in the face of an acceleration of the daily devaluations of the BCRA it is preferable to avoid using instruments related to the US currency.
On this occasion, the Palacio de Hacienda did not include the Lelites for mutual funds, which are usually very short instruments. For the Market Makers program, it includes a LEDE (fixed rate) to October 31; and two LECER (indexed to inflation) to November 23 and January 18, 2024. On the other hand, proposes five BONCER (also tied to inflation) with maturities of May 24, July 26, August 19, October 10 and December 14, 2024.
As detailed by Portfolio Personal Inversiones (PPI), the last test before the primaries has maturities for $710,000 million, of which 96.2% is in private hands. It is also almost the entire expiration of the month.
“The most striking thing at first glance is the absence of currency coverage. Contrary to what we expected, the Treasury will not offer dollar-linked instruments in this auction. We believed that the entity would try to take advantage of the demand for exchange rate coverage that we were able to observe during the last rounds”, notes PPI.
The private report highlights that “Dollar Linked sovereigns (TV24 and T2V4) are climbing 4.3% and 3.7%, respectively, in the secondary market.” “Given the exchange rate pressure, the electoral uncertainty and the high private participation, we expect the Treasury to be generous in the rates offered to obtain a good result”, indicates the report. It maintains that “by not issuing or reopening instruments adjusted to the official exchange rate, the entity will need to offer an attractive yield so that CER debt holders decide to renew their maturities.”
Source: Ambito
