The tender will be held this Wednesday. It offers very short-term bills at a fixed monthly rate of 4.2% so that banks agree to part with BCRA securities. Today, the Government expanded the debt issuance authorization for this year by $35 billion.
After receiving by decree a billion-dollar authorization to expand emissions of debtthe Ministry of Economy announced this afternoon the conditions for the tender this Wednesday, in which it will aim to deepen the migration of liabilities from the Central Bank to the National Treasury. This time, Luis Caputo will try to give the banks $3.5 billion through three very short-term bills that will pay a rate higher than that of the BCRA and which is operated in the secondary market.
As the maturities scheduled for the end of May are small, almost the entire placement will be destined to continue with the debt handrails from the Central to the Treasury. This is a strategy that, through different measures, the Government proposed to accelerate this month in search of a drastic reduction in the remunerated liabilities of the monetary authority in exchange for a sharp increase in the treasury’s debt at higher rates.
With this objective, Caputo and his Secretary of Finance, Pablo Quirno, will put three capitalizable fixed rate bills on the table (LECAP). The shortest will be only 14 days in advance: it is the reopening of the LECAP that expires on June 14, which will have a maximum amount to be placed of $1.5 billion.
On this occasion, you will pay a Minimum monthly effective rate (TEM) of 4.2%. This is a performance equivalent to that already validated in the auction two weeks ago, but it is highest that was operated in the secondary market: this same LECAP closed on Monday at a TEM of 3.6%. It is an incentive for the banks to agree to dismantle their holdings of repos (for which Centra pays them 3.3% or 3.06% if the impact of Gross Income is netted) and enter the Caputo tender.
In addition, there will be two other new LECAPs with a term of 42 and 77 days, which will be released without a minimum rate (the yield will be determined in the auction). Economy will seek to place $1 billion with each one.
Note in development…
Source: Ambito
