After The placing of debt from the province of Córdobaanalysts say there could be A domino effect on the rest of the provincial states. Córdoba’s operation on June 26 was The first broadcast of this type in many years and managed to tender US $ 725 million to seven yearswith a 9.75%rate. Given this panorama, it ensures that there are several context changes that collaborate in this regard: on the one hand The greatest appreciation of weight And, on the other, greater access to the international market.
“Today, The payment of debts in dollars became more manageable for the provinceswhich contributes to stabilize your credit profile, “he explained Mauro Chiarini, Senior FIX director (local affiliate Fitch Ratings), In the podcast look of CFO. This is due, as expressed above, to The appreciation of weight generated greater predictability, and that this relieved for many jurisdictions the financial burden that implied the debt in dollars.
In turn, from Cohenthey explained that Provincial public accounts are benefited by a more predictable automatic transfers flowalready without discretionary transfers, a situation that “had generated great uncertainty last year.” “Although not all cases are the same, marked differences still persist between provinces, reflected in individual qualificationsespecially for those with high dependence on short -term debt refinancing, “they clarified from this stock market broker.
Despite this, from this company it is argued that although the placement of Debt of Córdoba is a spearhead, The access of subnational issuers to the voluntary market for international debt remains the main challenge, but that The look of the market is very positive, so from Cohen Financial allies They believe that This precedent can be an incentive for other provinces with a good rating of going to the international market.
Córdoba placed debt: the signs that it leaves
Cordova He issued bonds for US $ 725 million under New York legislation, at a rate of 9.75% per year and expiration in 2032. And not only that, he also announced The repurchase of 69.8% of its bonds expiring in 2027 (about US $ 360 million) after the first successful placement. “The operation would seek to decompress the maturity profile, lengthening deadlines and taking advantage of the market window to refinance debt in better relative conditions. The placement had strong demand, which would reflect Market confidence in the fiscal management of Córdoba, in a context of Risk Increased Country “they explained in Aurum values.
From PPI They added more relevant data on the tender carried out on June 26, such as the fact that there was an important participation of local investors, which represented more than 40% of the total. With respect to the data to be taken into account on the characteristics of the asset: the new bonus foresees a amortization scheme in Three annual payments, from the fifth year of the instrument’s life and interests will be canceled semiannually. In this way, The new subsoberan title is located in around 165 basic points below the sovereign debt.
As reported by the provincial government, the funds will be used for strategic infrastructure projects and, as mentioned before, to repurchase international titles. “With this result, Córdoba becomes the first Argentine province to resume access to international financing since 2017, leaving behind a failed period of the city of Buenos Aires in December 2024. The Córdoba operation reopens a financing window to subnational actors under the most favorable environment to access global markets“They explained from PPI.
But, in addition to the confidence that brought to the market, this could contribute to the Indirect accumulation of foreign exchange for the Central Bank for several reasons: if the province Sell dollars to finance local expenses, those dollars can be bought by the BCRA and join the reserves, and also influences the expectation since A successful placement reinforces the perception of financial stability, which favors capital entry.
“Before an economic scenario in which the government is not achieving the level of accumulation of expected reserves, from economy They confirmed the purchase of dollars in block in the change market. The first of these cases was for US $ 200 million, from debt emissions from companies or provinces abroad. The latter was the case of the province of Córdoba, with the issuance of bonds for US $ 725 million. To this measure is added the possibility that the Government adds currencies by the granting of Aysa and Transener with what is estimated that some US $ 500 million could enter. Economy also has the possibility of repeating the operation of Bonte 2030 in pesoswhich already allowed the treasure to accumulate $ 1,500 million, “they expanded from Wise Capital.
OPPORTUNITIES AND RISKS FOR INVESTORS
Matías SalcedoHead of financing of Cohen financial allieshe said about it: “For investors, Provincial bonds can offer attractive yields, especially in scenarios where sovereign risk is moderated. However, they require A finer analysis, province by provinceto understand both fiscal accounts and exposure to short -term maturities and national transfers dependence. “
For this expert, in short, The provincial risk map changed for better, but is not exempt from challenges. “The appreciation of weight and the greatest predictability in public accounts provide relief and support a stable perspective for subnational emitters. However, access still limited to the international debt market imposes a roof to financing possibilities. Córdoba’s success could open a path, but it will be key to observe how the access window for other provinces evolves in the coming months“, hill.
Source: Ambito
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