Behind the new debt tender in pesos, the Finance Secretary arranged the issuance of a cer bond and two dollar-linked bonds maturing in 2025 and 2026. It did so through the Joint Resolution 15/2024 published in the official Gazette. What are the characteristics of each of the titles?
1. National Treasury Bond in pesos zero coupon with adjustment for CER (inflation) maturity on June 30, 20245 for up to an original nominal value of five trillion pesos:
- Date of issue: February 28, 2024.
- Due date: June 30, 2025.
- Term: approximately one (1) year and four (4) months.
- Denomination, subscription and payment currency: pesos.
- Interests: zero coupon (0) -discount-.
- Amortization: full upon maturity. The capital will be adjusted as stipulated in the “Capital Adjustment” clause.
- Capital Adjustment: the capital balance of the bond will be adjusted in accordance with the Reference Stabilization Coefficient (CER) referred to in article 4 of decree 214 of February 3, 2002, reported by the Central Bank of the Argentine Republic (BCRA), corresponding to the period elapsed between ten (10) business days prior to the issue date and ten (10) business days prior to the expiration date of the corresponding capital amortization service. The National Public Credit Office dependent on the Undersecretariat of Financing of the Secretariat of Finance of the Ministry of Economy, will be the Calculation Agent. The determination of the amount of the adjustment made by the Calculation Agent will be, except for manifest error, final and valid for all parties.
- Minimum denomination: It will have the original face value of one peso (VNO $1).
- Applicable law: law of the Argentine Republic.
2. The issuance of the “National Treasury bond linked to the US dollar zero coupon maturing June 30, 2025” for an amount of up to original nominal value US dollars six billion (VNO USD 6,000,000,000), with the following financial conditions:
3. The issuance of the “National Treasury bond linked to the US dollar zero coupon with expiration June 30, 2026” for an amount up to original face value US dollars six billion (VNO USD 6,000,000,000), with the following financial conditions:
- Date of issue: February 28, 2024.
- Due date: June 30, 2026.
- Term: approximately two (2) years and four (4) months.
- denomination currency: American dollars.
- Subscription currency: pesos at the reference exchange rate published by the BCRA based on Communication “A” 3500 corresponding to the business day prior to the bidding date (T-1).
- Payment Currency: pesos at the applicable exchange rate.
- Applicable exchange rate: It is the reference exchange rate published by the BCRA based on Communication “A” 3500 corresponding to the third business day prior to the amortization payment date.
- Interests: zero coupon (0) -discount-.
- Amortization: in full at maturity at the applicable exchange rate.
- Applicable law: law of the Argentine Republic.
Debt: Economy placed $3.2 trillion and renewed maturities
in a new tender of debt in pesos, the Ministry of Economy placed $3.2 billion this Monday. Thus, it renewed the month-end maturities in the hands of the private sector. As the remaining balance was small, this time he did not announce the repurchase of bonds from the Central Bank that he had carried out after the previous auctions.
The Secretary of Finance, Pablo Quirno, pointed out that the $3.2 billion placed in the last tender in February made it possible to refinance expirations for $3.09 billion, which implied a rate of roll over of only 3%. That is why, unlike previous tenders, this time the ministry led by Luis Caputo did not announce a repurchase operation of Treasury securities from the BCRA.
Strictly speaking, the main maturity this week was that of the TDF24 dual bond for more than $4 trillion, according to data from the Congressional Budget Office. However, as Ámbito said, a part had already been refinanced by the Government through a exchange decreed for public organizations who had this title in their possession in exchange for a bond indexed to inflation to 2025 (TX25).
The novelty is that this time the amount placed was practically equivalent to the commitments to be settled. In the previous tender, net financing had been obtained that was used to repurchase the sovereign bond in AL35 dollars from the BCRA.
Market sources told this medium that one of the possible reasons the slight change in the official strategy. In the latest operations, the bulk of the securities had been backed by liquidity insurance (known as puts in financial jargon) that the Central placed on the banks to stimulate the migration of their holdings from the United States. BCRA towards Treasury securities, as part of the policy of reducing the remunerated liabilities of the monetary authority in pursuit of the lifting of the exchange rate. After the criticism received, This week the economic team decided to limit the use of that tool to a single title.
Source: Ambito
