Monday, December 6

Tender: after the elections, Guzmán seeks to expand the net funding cushion and limit the issuance


For now, the Finance team, led by Rafael Brigo and Ramiro Tosi, seeks to gain a floor of net weekly debt of $ 15,000 million. If completed, it will be added to the $ 68,000 million cushion obtained in the previous tender. Thus, he hopes to reach the last placement in November with a greater plafond, scheduled for Friday 26, which will be more challenging: there, he will have to renew commitments for around $ 220,000 million, a figure that would have been higher if not for the two anticipated exchanges of the dollar bond linked T2V1 that allowed 73% of its original volume to be cleared.

In this train, Economía will offer five debt instruments in pesos tomorrow. On the one hand, it will reopen the issuance of TY22P (which pays a fixed coupon of 22% and expires next May 21) in search of the banks to renew the $ 35,000 million of interest that they will charge for their holdings of that same instrument. In addition, there will be two letters at a fixed rate, in which it will validate a rise in yields in line with what happened in the secondary market as a result of electoral movements. It will place a 22-day Lelite, in which the FCI that subscribe it will receive a nominal annual 34.75%, half a point more than in the previous tender.

Ledes will also reopen in January, which will come out with a minimum price of $ 927.20 for every $ 1,000 of nominal value, which is equivalent to a maximum rate of 41.55%, just below the 41.65% with which it closed yesterday in the secondary square but almost a point and a half above the last placement. From Economy, they pointed out that in the week before the elections this letter was operated up to 43% of rate and now little by little it is being accommodated again.

Finally, it will offer two titles tied to inflation, which were the most demanded in the previous auction as investors sought to hedge against the persistent rise in prices. These are the Lecer that expires next June and the Boncer TX23, which expires in March 2023. In both cases, they will come out without a minimum price. However, this segment could see a compression in the cost of financing since they operated with significant demand in recent days. For example, the TX23 was placed on November 4 at a real rate of 2.48% and yesterday it closed in the secondary market close to 1.5%.

The official intention is to end the last two months with an increase in funding in the market. Guzmán intends to shore up his financial program. Is that, after a first semester marked by fiscal discipline, in which it was able to meet its goals, in the second part of 2021 the dynamics began to become more complex. With a market in electoral mode and a higher concentration of maturities, the percentage of debt renewal in pesos fell from 125% in the first half of the year to 106% in the following four months. That, added to the greater needs of the treasury, increased the monetary assistance of the BCRA.

Thus, the financing mix of the fiscal deficit moved away from the budgeted guideline: covering 60% with issuance and 40% with new indebtedness in local currency under the premise that a greater printing of pesos increases the pressure on the dollar. At the moment, the Government accumulates a composition of 73% issuance and 27% debt. Although the officials maintain that, if the pre-cancellation of temporary advances made with the resources from the income of the special drawing rights (SDR) sent by the IMF is accounted for, the mix is ​​around 63% -37%. However, the bulk of analysts point out that the movement made with the SDR did not have a concrete monetary impact. Now Economía aims to get as close as possible to the 60% -40% mix.

The reduction of the issuance and the increase of financing via debt in pesos are already part of the Government’s plans to stabilize the macro: for example, the 2022 Budget project that will begin to be debated in the coming days in Congress. plans to reduce the BCRA’s assistance to the Treasury from more than 3% of GDP in 2021 to 1.8% next year. Although, along with the path of reducing the fiscal deficit, it is also a key axis of the negotiation with the IMF, which calls for a more accelerated adjustment. Both variables will be in the multi-year economic program that the Executive will send to Parliament at the beginning of December to lay the foundations for the agreement that is being negotiated with the multilateral organization to refinance the US $ 45,000 million debt that Mauricio Macri took.



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