He Ministry of Economy and Finance (MEF) anticipated that the gross financing needs of the central government for this year are projected at 4,752 million dollars, for which it will apply a strategy of issuing bonds and securities, but it also has disbursements of credits.
This emerges from the quarterly report of the Debt Management Unit (UGD), which included in the calculations the fiscal deficit estimated, accounting for primary deficit and payment of interests, for a total of 2,495 million dollars.
Added to this are the contractual amortizations of bonds and loans for 2,068 million dollars, as well as 189 million dollars of estimated accumulation of financial assets.
Meanwhile, the total gross funding in 2024 derived from the issuance of securities, both in the domestic and international markets, together with loans with multilateral organizations, is estimated at 4,541 million dollars.
At the same time, the total of net debt, Defined by law as gross funding less amortizations and accumulation of financial assets, it is estimated at about 2,284 million dollars, indicated the UGD.
The pillars for debt management
When evaluating the MEF’s funding strategy, the issuance of bonds and the functioning of secondary markets appear first, with Treasury Notes in UYU, UI and UP in different terms, with a target base amount equivalent to 500 million dollars for the first semester.
The organization considers that “a regular and predictable bidding schedule will maintain flexibility in its domestic issuance of Treasury Notes in local currency (in terms of base amounts and issuance frequency), evaluating changes in investor demand.”
An important factor will be the domestic Treasury Note issuance schedule, with a total base issuance amount for the first half of the year of approximately $500 million.
In the calendar announced months ago, the UGD incorporated tenders of lower maturity (for all currencies) and recalibrated the sequence of issuance of instruments in UI and in UP, in line with expected demand. They will also continue to accept Monetary Regulation Bills issued by the BCU for specific tenders (Series 31 in UI, Series 11 in UYU and Series 7 in UP).
Sustainable credit and the green bond
On the other hand, financing with multilateral credit organizations will be important, as is the case with the loan linked to climate indicators agreed with the IDB.
In turn, the UGD valued the Bond Indexed to Climate Change Indicators (BIIC) issued by the MEF, which was even distinguished with sustainable finance awards by Bonds and Loans and Latin Finance.
Another aspect to take into account is the improvement of the credit rating of different agencies, such as R&I, which highlighted that it expects “a firm rebound in 2024”, as well as Moody’s, from where they assure that “the high institutional strength” of Uruguay supports the credit profile.
Likewise, the government plans to continue strengthening the relationship with the investor base of Japan and promote the functioning of international secondary markets.
Source: Ambito
