He Government seems to open a window to a new debt swap of global securities. This was done through a Decree of Necessity and Urgency that was published this Monday in the Official Gazette, in which the conditions for future exchanges of bonds in foreign currency are modified.
He DNU 846/2024 amended article 11 of Decree 331/2022, which states that future exchanges, after the one carried out by Martín Guzmán for private bondholders in 2021, had to be made with species of the same currency. And the new rule establishes that, from now on, it will be indistinct: the Government will be able to receive bonds in dollars and deliver papers in pesos, or vice versa.
A change “sneaked” into another modification
The modification appears as “colada” within the mentioned DNU, which initially establishes changes to the rules of the Sustainability Guarantee Fund (FGS) of the National Social Security Administration (ANSES).
The FGS is stipulated to be able to hold up to 70% of its portfolio in public securities, whether or not they are guaranteed. Until now, it could only hold 50%.
To this end An article 3 is added that is supposed to allow the Secretary of Finance, Pablo Quirno, to make new debt swaps in which he will be able to deliver bonds in one currency and receive in exchange bonds in a different currency at market value.
“ARTICLE 11.- It is hereby provided that future subscriptions to public debt instruments, regardless of their currency of payment, shall beand can be carried out with public debt instruments regardless of their currency of payment.” the article says.
The DNU establishes that “the prices of The instruments will be set taking into account the values existing in the markets for each of the operations carried out within the framework of the approved procedural rules. by the Joint Resolution of the Ministry of Finance and the Ministry of the Treasury”. It clarifies that “said operations They will not be covered by the provisions of Article 65 of Law No. 24,156 of Financial Administration and Control Systems of the National Public Sector and its amendments.”
Interpretation of the new rule for debt exchange
He financier Ariel Sbdar, founder of Cocos Capital, He explained in his account X that “before, if you wanted to restructure debt in dollars, you had to do at least two of the following 3 things: 1) extend the term, 2) lower interest and/or 3) reduce capital.” “However, now, Exchanges can be made under market conditions without having to comply with the above,” he explained.
For the Argentine Center for Political Economy (CEPA), The measure violates the prerogative that states that public debt is a matter for Congress.
“They are interfering with the powers of Congress: debt renegotiation is a legislative matter. The Executive Branch cannot empower itself to renegotiate debt and do so without the guidelines that Congress must authorize,” CEPA stated.
The report states that “the The government is tired of saying that it has the dollars to pay the debt, but, at the end of the day, it is clear that it cannot resolve the external front: is running out of dollars and conditions for accessing markets are not improving.”
“He wants to renegotiate without any kind of requirement that would avoid worsening Argentina’s debt conditionsas happened with the Mega Swap of 2001, for which Federico Sturzenegger was prosecuted,” he warned.
On the other hand, he assures that “They do it secretly and by DNU because they could not do it in the Bases Law (they tried, but they withdrew it) and although they included it in the draft Law of Budget 2025Congress will hardly approve such arbitrariness.”
Article 11 of Decree 331 of 2022, signed by Martín Guzmán, authorized the Executive Branch to make debt swaps in pesos at technical valuewithout going through Congress. Now, it is allowed to be done in dollars and at market value.
Source: Ambito
