He Ministry of Economy and Finance (MEF) declared void the tender for Treasury Note (NT) Series 10yesterday, for 800 million pesos (20.71 million dollars) because the demand was barely 191 million, not reaching the amount offered.
It’s about the second consecutive time in which the reopening of this NT is declared void. In the previous tender, on March 28, the MEF did not achieve special interest from the market for the title either.
“Being a fixed peso note, which is not adjusted for inflation, makes it less attractive and less desired by investors since a real return is not guaranteed as the notes in Indexed Units offer you,” he told Ámbito.com Francisco Echegoyenhead of the Bureau of Gastón Bengochea Stockbroker.
Market appetite is lower for shorter-term notes, while multi-year option reopens often see demand that is often double the amount offered.
For example, the last tender for the series 3, a Treasury Note in Pension Units (UP) to 2040 had a demand of 2,565 million UP -equivalent to 2,336 million pesos or 91 million dollars, compared to the 1,100 million UP offered. The award was 2,200 million with a cut-off rate of 2.21%.
Meanwhile, the amount that was tendered yesterday for bills in national currency at a term of 28 days it was 4,497 million, resulting in a cut-off rate of 11.23%. The proposals totaled 5,597 million, with the minimum rate proposed being 10% and the maximum rate required by investors standing at 11.38%.
There will be two other BCU tenders this week
The title placement schedule by the Central Bank of Uruguay (BCU) continue this week with two tenders. Today and on Friday, the monetary entity will tender two instruments for a total of 7,500 million pesos.
Today there will be another adjudication, also at 2:00 p.m.: a title will be tendered for 3,300 million pesosequivalent to about 84.92 million dollars, with integration that same day and with a 77 day period. Of this total, 660 million pesos are considered non-competitive.
Finally, on Friday a title will be auctioned for 4,200 million pesos –108.09 million dollars– with integration that same day and with a maturity period of 189 days. Of this total, 840 million pesos will be considered non-competitive placements.
The government proposed as a pillar in debt management to increase funding in pesos through the placement of bonds in the local and international markets for a total of 3,785 million dollars for all of 2023.
Added to this is an increase in secondary markets (notes mainly linked to Indexed Units) for a total of 500 million dollars for the first semester.
Source: Ambito
