By Jorge Otaola
BUENOS AIRES, March 9 (Reuters) – Argentina’s financial market rose stealthily on Thursday, albeit with reduced volumes, due to a million-dollar internal debt swap launched by the government to ease uncertainty of the market in an election year and a completely slowing economy.
The Ministry of Economy proposes a reprofiling of the debt through options redeemable in 2024 and 2025, since peso securities with maturities until next June can be exchanged for others linked to inflation and at the exchange rate.
“The government is looking to ‘roll over’ the debt for 2024/2025, it’s about 50% of the debt in pesos that it amortizes until the middle of this year. Between banks, insurers and companies, the volume would be between 3 and 3.5 trillion pesos (up to about $17 billion),” an official source told Reuters on condition of anonymity.
“According to the estimates processed at the Palacio de Hacienda, the participation would have a guaranteed floor of 3 billion pesos due to the commitment of the entities to accompany the operation. Anything above 50% will already be a great achievement,” added.
The public exchange offer takes place this Thursday, with settlement-delivery next Tuesday.
It is “giving predictability” to the market to improve access to credit. We seek to give “certainty and credibility to the Argentine economy,” Economy Minister Sergio Massa said recently, in his third bond exchange since taking office in August 2022.
The South American country will hold presidential elections towards the end of the year, amid a complex scenario of devaluation, daily loss of dollars from central bank reserves (BCRA) and an annual projection of inflation. close to 100%.
* Over-the-counter bonds rose calmly by 0.3% on average with selectivity among savers, against country risk measured by the bank JP. Morgan up four units, at 2,103 basis points, just after noon in Buenos Areas (3:15 p.m. GMT).
* The exchange includes assets with maturities between March and June 2023, in exchange for inflation-linked “Boncer” securities from April and October 2024, and February 2025, plus “Duales” linked to the devaluation of the peso February and October 2024 and February 2025.
* “Looking at the big picture, what is happening abroad is key (also) to analyzing the behavior of emerging markets (…) However, we have two local elements that could affect: the mega exchange of (bonds in) pesos and reading the latest (bearish) agricultural production projections,” reports Portfolio Personal Inversiones.
* The benchmark S&P Merval stock market in Buenos Aires gained 1.38%, to 254,474.48 points, after rising 1.79% on Wednesday before the influential voluntary debt swap and conditional on a new rate hike updated by the US Federal Reserve soon.
* Operators await during the day the presentations of the balance sheets of important and influential companies, such as the energy companies YPF and Pampa, as well as those of services such as Telecom and Cablevisión.
* Argentina expects to spend about $1.8 billion on liquefied natural gas (LNG) imports this winter, below what it spent in 2022 and before a key gas pipeline opens from the vast Vaca Muerta unconventional hydrocarbon formation.
* The wholesale peso fell 0.18%, to 200.35/200.37 to the dollar, combined with the intervention of the BCRA, an entity which had to sell some 66 million dollars on Wednesday due to the demand from savers and importers and because of the shortage of agricultural products. dollars due to historic drought.
* In the market, the government is estimated to stop raising some $20 trillion this year due to the sharp drop in agricultural production, when it negotiates lower reserve targets for the BCRA with the IMF to make facing serious financial problems.
* The currency in the alternative segments lost ground to 385.6 units in the “CCL” and to 376.5 in the “MEP dollar”, and rose to 376 per dollar in the marginal or also called “blue” . (Reporting by Jorge Otaola; Additional reporting by Hernán Nessi; Editing by Lucila Sigal)