Although the two tenders for debt November, before the change of government in the Ministry of Economy we are already beginning to have the feeling of a task accomplished. At the start of the Minister of Economy, Sergio Massa, The peso market was about to catch fire and a year later, Most of that debt that was due from July 2022 until now is almost completely rolled over. with maturities ranging between 2024 and 2025.
Now with the result of the first round of the electionswhich left Massa as better suited to face the second round, all the forecasts what the market was doing Regarding potential dollarization, they move away and with this the hedging options in dollars deflate..
In that framework, This Friday the Treasury will go out to renew some $505,000 million. To attract investor demand, it will offer titles indexed by inflation and the official exchange rate. There will be a Lecer on February 20, which is part of the market makers program. Then, a Linked Dollar bond (TV24) will be made available in April 2024, a Boncer (T6X4) that expires next May; a Dual bonus to June (TDJ20) and a BONCER to October (T4X4). On the other hand, already maturing in 2025, it offers a Boncer for February (T2X5) and another for March (TV25).
“With a completely different situation than the last auction, The new panorama that opened after the elections increases the incentives to maintain the fixed official exchange rate (or a crawling peg below inflation), at least until December,” says the PPI brokerage company. The entity says that The context after the elections “poses a more constructive climate for debt in pesosreducing the possibility of a scenario of uncontrolled nominality and increase in the probability of payment.”
Juan Pedro Mazza, Fixed Income strategist at Cohen, explains that “with a strengthened ruling party, we anticipate a much more orderly transition and the risks of extreme events are attenuated.” “Milei lost inertia and needs to moderate to win the elections. It is unlikely that she will once again encourage agents to get rid of their assets in pesos with the aim of reducing demand for the Argentine currency,” says Mazza.
If between the PASO and the first round the adjustable bonds per dollar experienced a furylike almost any financial instrument that could offer some coverage against an uncertain scenario, taking into account that until that moment Javier Milei appeared as a probable winner, the surprising result of the election that puts Massa on top and with greater chances, changed completely the feeling that there is in the market and now CER bonds appear more attractive in the short term.
In November, meanwhile, there are two tenders for just over $1.6 billion, And in December there is an almost symbolic expiration. The Ministry of Finance states that By that time everything will be in order for the official who has to continue at the helm, who will have time to decide whether to continue with the current dynamic or make some new exchange. In the first quarter of 2024, new important maturities begin to fall, but it is believed that in the event of a victory for the ruling party, the short, medium and long-term curves will be able to be rearranged without major problems.