Debt swap: Economy achieved 78% adherence and cleared maturities for $7.4 trillion

In what was the “biggest debt swap in Argentinean history”, The Ministry of Economy managed to clear maturities for $7.4 trillion in the remainder of 2023, and by achieving 78% acceptance from investors, more than expected by the market.

The National Treasury had to face maturities for $9.5 trillion, corresponding to $1.2 trillion in June, $4.6 trillion in July, $2.3 trillion in August and $2.6 in September. After this conversion operation, managed to reduce projected maturities by $7.4 trillion, corresponding to $0.1 trillion in June, $3.6 trillion in July, $1.7 trillion in August and $2.1 trillion in September.

So, the maturity profile for the remainder of 2023 went from $11.6 trillion to $4.2 trillion, which implies a decrease of 64%. Also, it is highlighted that “by the end of the year the panorama looks clear”. In this sense, average maturities with the private sector for the last quarter of the year are equivalent to 0.1% of GDP.

Of the total reduction in maturities scheduled for the coming months, it was possible to extend 13% as of August 2024, 36% as of November 2024, 27% as of December 2024, and 24% as of January 2025. In this way, the weighted average maturities were extended by 16 months.

It should be noted that in the conversion operation a total of 548 deals, representing a total of $7.5 billion.

“Due to the characteristics of the offer that established exit titles between 2024 and 2025, we obtained the support of long-term institutional investors such as financial institutions and insurance companies. In this sense, the total adhesion of the banks was around 90% “, they commented from Economy.

And they added: “Going forward, we will continue to carry out the usual tenders according to the published schedule and renewing the maturities of investors who, due to their profile, are positioned in short instruments (fundamentally, Mutual Investment Funds and companies).”

The next tender will take place next Wednesday, June 14, as previously reported in the preliminary schedule of tenders for the first half of 2023.

“Today we carry out the largest public debt swap in Argentine history in the domestic market; not only because of the economic significance of the impact on public accounts but also because it covers the most important cumulative maturities of the second semester,” Finance Secretary Eduardo Setti said in a tweet.

The voluntary conversion of assets in pesos announced this week was carried out “very successfully”The government spokeswoman also said. The swap “The second semester clears a lot, it completely clears the debt in pesos in the second semester,” said the official spokesperson, Gabriela Cerruti, at a press conference.

Offer Conditions: Treasury offered the following options per eligible security:

Option 1

Eligible Title: X16J3

Conversion option: CER-adjustable national treasury bond maturing on 12/13/2024.

Option 2

Eligible Title: TDL23

Conversion options: a dual currency national treasury bond due 08/30/2024; and/or a dual currency national treasury bond due on 11/29/2024; and/or a CER-adjusted national treasury bond maturing on 12/13/2024.

Option 3

Eligible Title: X18L3

Conversion option: CER-adjustable national treasury bond maturing on 12/13/2024.

Option 4

Eligible title: T2V3D

Conversion options: a dual currency national treasury bond due 08/30/2024; and/or a CER-adjusted national treasury bond maturing on 12/13/2024.

Option 5

Eligible title: S31L3

Conversion option: CER-adjustable national treasury bond maturing on 12/13/2024.

Option 6

Eligible title: T2X3

Conversion option: CER-adjustable national treasury bond maturing on 12/13/2024.

Option 7

Eligible title: TDS23

Conversion options: a dual currency national treasury bond due 08/30/2024; and/or a dual currency national treasury bond maturing on 01/31/2025; and/or a CER-adjusted national treasury bond maturing on 12/13/2024.