It will be the first test of the market after the reduction in monetary policy, the February inflation data that showed a slowdown and the mega debt swap in pesos that allowed this year’s maturities to be postponed to the end of 2025 and mid-2028.
The surprise of this day comes from the debut of the LECAPS, an instrument that has not been used since 2019 with former minister Hernán Lacunza. It is a letter of the Capitalizable Treasury in Pesoswhich are direct financing titles to the National Treasury to short term and attractive interest rate.
In addition, the Secretary of Finance offers other financial instruments such as the zero-coupon BONCER bonds (tied to the inflation coefficient) and the BONTE (Treasury Bonds).
The reception of offers will begin at 10:00 a.m. this Thursday and will end at 3:00 p.m.
Lecaps: can they have a good reception from investors?
As Delphos Investment explains, “having a fixed rate instrument allows us again to calculate breakeven inflation to date, comparing it against a CER instrument. This calculation involves contrasting the returns of a fixed rate bond (in this case, Lecap) with a real rate title (in this case, T2X5). With the market CER rate and a projection of inflation, we can clear the fixed rate at which the bill should be quoted”.
“In our base scenario, assuming annual inflation of 145%, Lecaps should be quoted at a TEM of 6.5%, while, in the optimistic scenario where annual inflation would be around 122%, the TEM would correspond to 5%. Everything seems to indicate that This instrument could be well accepted by investors, even more so in a context where there are no excess products “at rate” in the short term. The final TEA will indicate the market’s expectation of inflation, which should be between the two values mentioned, perhaps closer to the highest of them,” they concluded.
The analysts of PPI judged that “the return of fixed rate instruments makes sense given that a part of the private sector that did not enter the exchange last week did not do so due to short-term liquidity needs (remember that for banks to enter the exchange it would have been meaning a pronounced mismatch between their liabilities – fixed terms – and their investment instruments).
“On the other hand, faced with a very pronounced disinflation path, “Many players would prefer to obtain a certain flow for the coming months, which this LECAP provides.”
Source: Ambito
