Government Argentinian achieved an average adherence of 64% for the voluntary exchange of its sovereign debt in local currency, an initiative announced last Monday with the aim of alleviating the burden of short-term maturities and providing greater certainty to the financial system, as announced this Thursday.
According to sources from the Ministry of Economy, this tender managed to clear maturities for more than 4.34 trillion pesos (about 21.661 million dollars), which allowed “extend the curve to 2024/2025″.
In this context, the Ministry of Economy was able to exchange Treasury bills and bonds, maturing between March and June of this year, for bonds maturing in April and October 2024 and February 2025, according to a statement.
“For the maturities of April, May and June, the level of acceptance reached 61.5%, while for the maturities of March (including the operation carried out in January) the participation exceeded 72%”, The sources indicated, about a tender that added an adhesion of 64% of the eligible titles.
Among the most relevant participants are Banco Nación, Provincia, Galicia, Santander, Credicoop, Banco Ciudad and ICBC, which constitute some of the main holders of debt issued by the Treasury in the local market, according to the Ministry of Economy.
“The profile of holders concentrated a significant participation of mutual funds and corporate treasuries, which due to their business flows maintain a short-term investment horizon”sources from the Palacio de Hacienda explained.
A MORE ORDERED MATURITY CURVE
This voluntary exchange of bonds was announced last Monday, after weeks of rumors about a possible “reprofiling” (compulsory rescheduling of maturities) and warnings from various private analysts about the Treasury’s ability to refinance the bulky maturities through successive new debt placements at increasingly higher rates.
The Argentine Minister of Economy, Sergio Massa, assured at that time that this operation allows outlining a maturity curve for 2024 and 2025 “much neater”, disabling “That idea of the bomb, that every two or three months something is about to explode” in the domestic debt market.
Also, this exchangedecompress“The Treasury’s constant need to go to the market or to temporary advances from the Central Bank, according to the minister, at a time when Argentina must lower its primary fiscal deficit this year to 1.9% of GDP, from the equivalent of 2.4% of GDP in 2022.
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