The portfolio led by Sergio Massa analyzes issuing new bonds maturing in 2026 and 2027, lengthening the sovereign debt curve as a way of sending a signal to the private sector to also extend their maturities. Private investors have 2.8 trillion pesos in local debt that matures in the second semester.
The Ministry of Economy could issue new bonds in pesos maturing in 2026 for public sector creditorsin an attempt to exchange 4 trillion pesos ($19.7 billion) of debt maturing in the second half of this year, according to a senior government official told Bloomberg.
The portfolio led by Sergio Massa analyzes issuing new bonds maturing in 2026 and 2027, lengthening the sovereign debt curve as a way of sending a signal to the private sector to also extend their maturities. Private investors have 2.8 trillion pesos in local debt that matures in the second semester.
Public sector holdings represent 60% of the debt maturing in the second half of 2023. the new bonds Would they be linked to inflation or would they be a dual bond?, similar to the instruments issued in the last auction on March 9. A dual bond is an instrument in which investors receive the higher rate between two options at maturity, in this case, either from inflation or from the exchange rate.
The Government has a mountain of debt in pesos, equivalent to US$174,000 million, and the largest amounts are concentrated during the months leading up to the October presidential elections. This debt grows almost exponentially because many of its obligations are linked to inflation that exceeds 100%.
In a local debt swap held earlier this month, the Treasury exchanged a total of 4.34 trillion pesos for new bonds for 2024 and 2025, which calmed the immediate concerns of a possible default of the local debt. However, the government still it faces maturities with the private sector of 600,000 million pesos in March and around 1 trillion pesos a month between April and June.
To exchange local debt for bonds maturing in 2026, the Ministry of Economy could issue a decree forcing public institutions to redeem their holdings during the second half of this year. This would make it possible to better align interest rates with holders, the official told Bloomberg. In general, public sector holders are expected to participate in debt renewals, since management functions are controlled by the Presidency.
Source: Ambito
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