Dictionary of the economic crisis: reperfilamiento, LETES, LECAP and more

After the announcements of the Minister of Finance, Hernán Lacunza, it rains the questions of style: "What do you mean?" That's why we bring you some definitions to take into account:

Goods of treasure

These are short-term public debt securities (less than 18 months old) and are issued at a discount, which means that they are generally bought at a price and settled at a higher price, here is the profit.

Then, they differ from bonds by their term (bonds have longer terms) and because bonds usually pay coupons established in addition to what it claims to accuse when it expires.

In turn, in those years different types of Treasury letters were designed. Those who are active today are:

• letes: National treasury bills are considered safe because they protect their value in dollars and also pay interest.
• THE CAP: The capitalizable letters are in pesos, are paid in full at maturity and also have a monthly capitalizable coupon.
• READ: The ERC-adjusted Treasury Bills (benchmark stabilization coefficient) are in pesos and are fully paid to maturity, plus an adjustment for inflation.
• LELINK: Dollar-denominated treasury bills have been innovated this year and the change in the official exchange rate is being paid at the end of the year.

reprofiling

This is the term used yesterday by Lacunza to designate extend payment periods, given that current debt maturities are impossible to guarantee. In this sense, reperfiler, it is to extend precisely the deadlines without withdrawing capital.

This is a fact for institutions that have subscribed to the Letters developed in the previous point and what we are looking for, it is to obtain these extensions also with the debt from foreign banks and the IMF.. For this, a bill will be introduced in Congress, as announced yesterday, and must be negotiated in each case.

Selective by default

In technical terms, a fault This is the violation of legal obligations or the terms of a loan. In this directionthere is a breach of the terms agreed upon for institutions that have subscribed to treasury bills. Now well, This does not mean the cessation of payments.