Guzmán plays to capture $ 110,000 million and ease the year’s highest payout

The first item will be the renewal of the 110,000 million dollars that remained after the exchange carried out last month, which cleared 64% of the maturity of TC21. The difficulty lies in the fact that on this occasion, most of the amount carried forward was provided by the public sector: the ANSES Sustainability Guarantee Fund held approximately 58% of this share. So in the market, they estimate that this week almost all of the balance owed is in private hands.

The Ministry of Finance team, led by Mariano Sardi and Ramiro Tosi, will come out to find enough pesos to make the full payment. Although the amount is expandable in case there is a big appetite from the investors. A higher number could be a sign of strength for the next two weeks. So far, in the first call for tenders in July, the Treasury obtained a net funding cushion (over-indebtedness on commitments) of $ 38.1 billion.

Proposals

To achieve this, Finance will put seven Letters on the table. Six of them will be reopenings of instruments already issued and will be released without a minimum price, that is to say without a priori maximum rate. The new one will be an LED (fixed rate) starting Jan. 31, which will have a base price of $ 821 for every $ 1,000 of face value. The other invoices will be Ledes and Lepase (variable rate) on October 29, Ledes on November 30, Ledes on December 31 and Lecer on February 28 and May 23. In the last call for tenders, the reduction rates for invoices due this year were between 38.98% and 40.39%.

This time there will be three titles available for banks to use to build in reserve requirements as they last over 180 days. These are the two Lecers and the new Ledes from January. This alternative, which allows financial institutions to obtain better returns than with Leliq and which was authorized by the Central Bank in June, has already borne fruit. Last month, it was used to consolidate Treasury investments and obtain the highest net funding of the year ($ 158,000 million): according to Equilibra’s calculations, around 60% of the amount invested came from banks. .

Lorena Giorgio, chief economist of the consultancy firm, analyzed: “It is positive that they opened up a new possibility for banks via the Ledes in January. In the last calls for tenders, when they repeated the duration of the instruments, we saw that the offers for Bonds of more than 180 days (mainly from banks) decreased, because they were already matched to this duration. Therefore, by opening up the range of options further, we should see in this letter a greater capacity of the banks. It is important to attract funding from these channels because after last month’s TC21 swap, most of the month’s remaining maturities are in private hands ”.

At the same time, this same Tuesday between 10 a.m. and 3 p.m., Finance will offer an exchange of the TX21 bond against a basket composed of 25% by Lecer on June 30, 2022, 35% by Boncer TX23 (due March 25, 2023) and 40% for the T2X3 (as of August 13, 2023). The conversion will be carried out under the terms of law 27,561 which allows the eligible security to be taken at its technical value, in this case $ 1,691.91 for $ 1,000 of par value (NPV). While the Lecer will reopen at a price of $ 998.32 for $ 1,000 of VN; TX23, at $ 1,549.58; and the T2X3, at $ 1,376.38.

“Considering the fact that August is a month with many maturities, they follow a strategy similar to the one they adopted with the June-to-July and March-to-April swaps: anticipate and postpone large maturities in advance. without reaching moments that could be tense. having to roll a lot of instruments, ”said Joaquín Waldman, economist at Ecolatina. In this case, the focus will be on how much they can trade from assets held by the private sector.

Unlike the TC21 swap, public sector holdings are in the minority this time. Private estimates indicate that ANSES would have a little less than a third of TX21’s $ 380,000 million. Within the privately held part, there is a part owned by foreign funds such as Pimco and Templeton, although it is not predominant. Based on the values ​​proposed for the conversion, Giorgio estimated that the exchange appears to be more aimed at wiping out public sector assets since the proposal is “only 1% above the market price”.

Keys

The result of the dual operation will be important for the official financial strategy, which consists of extending a financing mix balanced with cash flow requirements throughout the second half of the year. So far in 2021, 51% was covered with BCRA assistance (below the budget guideline of 60%) and 49% with net debt. In this research, the next two weeks will be decisive: according to data from the Congressional Budget Office, over this period, the deadlines amount to $ 718,099 million. The first challenge will be to renew them and, as far as possible, to obtain additional financing which minimizes the need for monetary issuance.

In this train, the Economic Cabinet is advancing new instruments to support financial investments, one of the points according to the IMF. In addition to the recent BCRA reserve requirement measure, the finance and finance ministries and the CNV have regulated the market maker program, with which they will seek to bring more liquidity to the secondary public debt market. This week, as this newspaper has learned, Finanzas will meet with Alycs and banks interested in participating as market makers.