The Government made the Bonar 2035 purchase process official after the announcement in the last tender at an original nominal value in dollars of more than 7 billion.
After in the last tender the Ministry of Economy will repurchase 3 billion pesos of the Bonar 2035the Government made its purchasing process official through the Joint Resolution 13/2024 with the Ministry of Treasury and Finance in Official bulletin.
The operation of purchase of the AL35 was made for an original face value of US dollars seven billion five hundred ninety-five million eight hundred eighty-one thousand five hundred ninety-six (VNO u$s7,595,881,596), at a price of pesos thirty-eight thousand eight hundred fifty ($38,850 ) for each original face value of US dollars one hundred (VNO u$s100). The operation will be settled on Tuesday, February 20, 2024.
At the same time, as expected, after the purchase will be removed from the public debt records. The amount represents approximately 30% of the Monetary Base, stabilized at 10.5 trillion pesos. “This operation allows us to continue with andThe process of cleaning up the BCRA’s balance sheetthe reduction of the monetary overhang and the improvement of the financial burden of the Treasury debt,” the Treasury Palace explained the decision.
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In the previous day, the bond rose more than 10%. In the PPT (Priority Price Time) segment of ByMA (Argentine Stock Exchanges and Markets) this exchange title rose 10.7% in pesos in 24-hour operations, 8.6% in 48 hours, and 6.3% in Immediate Cash. In dollars (AL35D) this title gained 4.9% in Immediate Cash, and 4.7% in 48 hours. On the other hand, the Bonar 2041 (AL41) It advanced in the PPT segment up to 8.4% in pesos and 4.1% in dollars.
What the bond buyback process entails
Although initially the bet is that the buyback will result in the burning of part of the economy’s pesos, It is not certain that the net effect of this operation will be that of a monetary contraction. This is influenced by the magnitude of the migration of banks from BCRA debt to Treasury debt on this occasion. Gabriel Caamano, director of Consultora Ledesma, explained it like this: “It depends on where the weights of the net financing of the tender came from. In the last two operations, more pesos came out of the Passes than those canceled by the BCRA.”
For Nicolas RivasBAVSA trader, the AL35 buyback is a two-way play. “They are taking pesos at a negative rate in real terms for three and four years, and they are buying back debt in dollars at very low parities. And I think that perhaps it also has a political side to show that, on the one hand, they issue BOPREAL but, on the other, they lower the dollar debt that the public sector has,” he said in dialogue with Ámbito. And from the market’s perspective, he considered that it works as a reinforcing signal for the Government’s message regarding “that they are going to pay the debt.”
Source: Ambito
