The fear of funds is concrete and punctual. They consider that without the signing of a classic Extended Facilities (in its toughness) and the requirement of meeting specific goals during the period in which the country should not make payments (until the second half of 2026), their holdings in restructured bonds they will continue in default prices.
And, consequently, they will continue with their financial assets at a value lower than the cut-off Net Present Value of the August exchange of last year, of 54.8%. The titles launched in the restructuring today show a value of between 32.8 and 37.9%; a level that analysts call “distressed.” The main fear of the bondholders is that only towards the end of 2024, the year in which the capital payment of the bonds should begin to be applied; These government securities would have practically no commercial value in the international capital market; with which they should remain in the investors’ portfolios.
Obviously it is a problem that for the economic team managed by Martín Guzmán, is not among the priorities of the negotiations with the IMF. This is why investment funds know that the only bullet should be aimed at the IMF.
The concern is actually similar to that of the financial body. The IMF believes that the agreement (be it light or hard), has behind a plan that is solid enough to result in the savings of the dollars that should be liquidated to the IMF in 2026, the first year of payment of capital and interest in a Facilities Extended to 10 years. But, unlike the Fund, where maturities can be renegotiated and payments can be extended over time, in the international voluntary financial market the debt must be liquidated. And this can be done with reserves or with the issuance of new government securities launched in voluntary debt markets, preferably on Wall Street. For the bondholders, it is indifferent whether the money for the fulfillment of the obligations comes out of the dollars accumulated in the BCRA or of the new issuance of liabilities. The important thing is that the money is there, and that from this novelty the prices of the papers are normalized and they are quoted at a position more compatible with public securities of a country with an emerging rating; and not always on the verge of default.
For this to take place, the international bondholders agree, this is the exact moment in which pressure must be placed on the IMF so that the body managed by Kristalina Georgieva forces Argentina to sign an agreement that guarantees fiscal, monetary and accounting solvency strong enough for your payments to be secured.