:quality(85)//cloudfront-us-east-1.images.arcpublishing.com/infobae/GQMYJ4DMSBE47N5QRNV2RUUMAA.jpeg "Bankers have promised the government and the opposition to refinance the debt in pesos until 2025")
Debt in pesos is the big “hello” facing STEP, but it could cease to be so if negotiations by Argentina’s top bankers and the government are successful. The idea is to achieve a strong refinancing of the peso bonds, which mature in the coming months, with the idea of stretching the terms in stages until 2025.
Economy Ministry secured $400,000 million in peso tender
With this result, the Treasury has covered most of the maturities of the month and has accumulated, so far this year, an additional cushion of more than 320,000 million dollars.
It is only in the second quarter of the year that 6 trillion (millions of millions) pesos expire and until the elections the figure extends to 10 trillion. That’s too many zeros; at the official exchange rate, they are equivalent to approximately 50,000 million dollars. Talks with the Ministry of Finance to move to a voluntary exchange are advanced, although the instruments that will be delivered to participating banks and mutuals have not yet been defined.
The issue goes beyond the current government and also involves the opposition. In fact, it was one of the main issues raised at the luncheon hosted by the presidential candidate of Ensemble pour lechange.Patricia Bullrich, with the small table of Adeba, the chamber that brings together the banks of the national capital. There was its owner, Javier Bolziconext to Jorge Brito (Macro), Eduardo Escasany (Galicia) and Andres Meta (BIND), among others.
Accompanied by the economist and assistant Luciano Laspina, it became clear during the meeting that it is in no one’s interest to toy with the idea of another default. One of the bankers present was careful to clarify what we are talking about in terms of debt: “Refinancing the bonds in pesos so that they mature in January 2024 does no one any good. This cannot be a problem for the current government or for the one that will take office on December 10”.
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The previous week, an opposition document had warned of the new ticking time bomb that Kirchnerisme was leaving to the next government, with reference to the millionaire deadlines in pesos that the Treasury will have to face in the months to come.
“Refinancing peso bonds to mature in January 2024 is of no use to anyone. This should not be a problem for the current government or for the one that will take office on December 10,” said one of the bankers interviewed by Patricia Bullrich.
Extending deadlines is a win-win strategy, with which it makes sense that interests are aligned. In the case of the current government, because an exchange would allow it to access the presidential elections more calmly.
The opposition would also benefit as they would have a more comfortable scenario if they were to govern. And the banks are the main interested in avoiding a new reprofiling or directly a default, since in the percentage of their assets there are more and more bonds.
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The benchmark rate has remained unchanged for the past few weeks, but prices have accelerated and the rules of the game have changed.
Of course, for everything to go well, it is essential that the deposits in pesos remain stable. But for this, it is essential to avoid “stressful” situations in the months preceding the elections.
Nor is it enough with the government’s commitment to avoid “reprofiling” at all costs. This would involve issuing unlimited pesos to pay the maturities of peso bonds that the market is unwilling to refinance. A repeat of a situation similar to that of last June would be dramatic in the run-up to the elections, since the excess of pesos would put pressure on the financial dollars and inflation.
But while some consensus is moving forward to get the financial situation back on track, politics has its agenda and is entering moments of high definition. The formation of a commission within the Frente de Todos to convince Cristina Kirchner to run as a presidential candidate was the most relevant news of the week. Although it is an initiative that borders on the absurd, the reading that emerged from a good part of the “red circle” is interesting: such a decision would never have been taken without a wink. eye of the Vice President herself.
Just a few months ago, it was Cristina herself who publicly declared that she would not be “a candidate for anything” in the next presidential elections. Later now from a “proscription”, which is not one. And in the past few hours, the possibility of her finally being a candidate has once again gained momentum.
The same could happen to Cristina as to Menem in 2003: he was the candidate with the most votes in the first round, but he avoided the second round because he would have suffered a historic defeat.
There are two main reasons for it: the first is that in almost all polls it is the candidate with the most votes and the second is that no candidate with a real chance of winning the election emerges within the ruling party.
However, the same thing could happen to Cristina as to Carlos Menem in the 2003 election: he was the candidate with the most votes in the first round, but he didn’t even run in the second round because he would have suffered a historic defeat against later President Nestor Kirchner.
The possibility of a candidacy for Cristina keeps the markets in suspense. The main reason for the rally in bonds and the strong rise in equities, with increases of up to 200% in six months, is the anticipation of a change in the political cycle.
The mere possibility that the toughest Kirchnerism has electoral chances is something that does not go unnoticed by anyone. PASO 2019 had a very hard impact on investors, who were betting on a primary pair. This victory for Alberto Fernández by 14 points was a “black swan” that caused millions of dollars in losses. There won’t be many people ready to stumble over the same stone.
Sergio Massa is the other who pops up with possibilities and has his own stream of voters. But at the meeting of the political table of the Frente de Todos, he insisted on what he said both in public and in private: “Being Minister of the Economy and candidate for the presidency is incompatible, at least in Argentina.
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