Macri postpones the payment of the debt in letters and proposes to renegotiate the bonds

The national government announced yesterday the forced extension of the terms of payment of the short-term debt nominated in Letes and Lecap, as well as other similar instruments, in the hands of institutional investors. It will also propose to Congress and private creditors a "voluntary" transfer of maturities of debt securities issued under domestic and foreign jurisdiction. In addition, it will begin negotiations with the International Monetary Fund (IMF) to renegotiate the payment of the $ 57 billion loan agreed to save the Macri administration from the 2018 default.

Selective defect, forced exchange, new mega-change (in memory of the operation carried out by Fernando de la Rúa), technical defect, near-default, restructuring. Many economists and badysts have named the measures announced yesterday by the Minister of Finance, Hernán Lacunza. The official called it "reperfilamiento", a neologism defined by the absence of referrals and renegotiation of interests in the proposal.

In any case, Lacunza announced the beginning of discussions to resolve the new public debt crisis which, under the macro-economic administration, has increased from a gross level of about one hundred billion dollars, to 'to reach the level of GDP. Of course, the executive seeks to "share" responsibility with Congress, where the majority is an opponent. An attempt already made by the IMF mission when he met the presidential candidate for the Front of All, Alberto Fernández.

Specifically, the head of the economic portfolio met with officials of the Fund before giving the press conference to announce the measures. The mission of the agency left yesterday in Washington. From there, the agency announced that it will badyze the offer of the Argentine executive.

The point of the package that has immediate application is the mandatory extension of short-term maturities. They are seeking commitments for about $ 15 billion, which can not be renewed and put pressure on the Central Bank's badets. The declared objective of the minister being to preserve the stability of the exchange rate, the pagadios suppresses the "conflict which is created in the use of the reserves, according to its own words". In the absence of announcement on dollar demand restrictions, the message is that the manager has opted for a selective default instead of curbing the dollarization of the portfolios. Between debt and flight, he voted in favor of flight.

Letes and Lecap

The first measure announced was to extend the maturities of short-term debt, namely Treasury bills (Letes), capitalization bonds (Lecaps), Lecer (letters attached to the ERC) and letters related to the dollar (Lelink ) for the holders of institutions, such as banks, insurance companies and investment funds.

People who have acquired Letes will charge in a timely manner. They represent 90% of the holders, but 15% of the total amount issued. The remaining 85% is held by institutional investors. These will charge 15% by the due date, 25% at three months and 60% at 6 months.

In the case of capitalization letters (Lecap) expiring after 2020, they will only be extended by 3 months. "

"The measure aims to ease the state's burden of having to pay debt maturities that, until before the Paso, were renewed at 88% and then dropped to 10%," said Mr Lacunza. In fact, yesterday the Ministry of Finance had to refinance some 2.6 billion US dollars in pesos and dollars, but the operation was abandoned.

Bonds and IMF

Lacunza also announced the voluntary extension of debt maturities issued with local jurisdiction bonds. He will present to Congress a bill extending the deadlines, without removing interest or capital.

In the case of obligations under foreign jurisdiction, he will also apply for a voluntary extension. This requires activating the "collective action clause" and bringing together the majority of creditors.

It will also begin negotiations with the Fund for maturities from 2020 to 2023 inclusive.

"We want to give all political forces a protective bell," said the minister.

IMF badyzes government proposal

The IMF explained its willingness to badyze and badess the impact that the proposal could have on the country's debt maturity reporting to the agency. "The Fund's services are badyzing them and badessing their impact, and they understand that the authorities have taken these important steps to meet liquidity needs and preserve the reserves," the spokesman said. the agency, Gerry Rice, in a statement. "IMF staff will stay in close contact with the authorities," the spokesman said. Press representatives also confirmed that the IMF delegation in Buenos Aires in recent days had already returned to Washington and that during its stay in the country, it had conducted "fruitful discussions" with Lacunza and Sandleris. He also mentioned the meeting with Alberto Fernández.