International banks also defended the debt swap: “It was the most reasonable thing to clear up the matter”

The President of the Association of Banks of Argentina (ABA) Claudio Cesariodefended the debt swap in pesos that the Ministry of the Economy announced on Monday and questioned whether the opposition had qualified it as a “vile and ruinous” operation: “You must not mix the political issues with what it means in economic matters,” he said.

The ABA represents international capital banks with operations in the country.

“We in our sector have understood that it was the most reasonable to try to fix the problem and extend the deadlines,” Cesario said of the trade. The bankers had a meeting on Monday with the Minister of Economy Sergio Massa finalize the details of the operation, for which the executive will seek to clarify 7 trillion pesos deadlines.

Cesario asked the opposition “not to mix political issues with what it means in economic matters”. Together for Change had described the bond swap as a “despicable and ruinous” operation for the public accounts. In economic terms, I think it’s an advantage and it is well planned,” the executive said.

“A vile operation is when you buy at a price that is not the market price”, and according to Cesario, the exchange does not pose this scenario. “There is talk of a Central Bank guarantee which it is not such“because, in this sense, “the Central is not guaranteed starting price Nothing like that”.

“It’s not insurance as they say,” Cesario said for his part. And he specified that thus “I have the possibility of selling the securities in exchange for cash, in an operation that already exists at the Central Bank”. So, the ABA chairman mentioned, the option bondholders will have is to “sell the banks a liquidity option” in case they need it. “You pay for this option, whoever needs it shows up and channels it,” he said in dialogue with Radio Miter.

“Just as this liquidity option is voluntary and the banks they can rent it or not. The swap is also voluntary,” said Cesario, who also preferred not to discuss the possibility of a debt default. “It’s ugly to talk about default in a country like Argentina which is characterized by serial default,” he said.

And he clarified: “What I believe is that (if the debt was not renegotiated) the prices would be complicated.” In this way, then, “they went ahead and tried to renegotiate the best possible price” because if the negotiations had taken place closer to the electoral body “the price could have increased”, concluded Cesario.

The Ministry of the Economy will seek to generate more 7 trillion maturities debt in pesos appearing in the payment schedule until the end of June. The economic team would consider the operation successful with a level of bank membership near 50% in favor of new titles 2024 and 2025.

Thursday’s peso debt swap will include a majority of new bonds linked to the inflationwhile the option “double” which protects against rising prices and also against a possible devaluation will take place until February following, according to the fine print of the offer that the Ministry of Finance announced on Monday.

The exchange call specified that the bonds that will be eligible for the operation will be eight variants which expire between March 25 until June 30th and which include fixed-rate discount bills and CER bonds, as well as a dollar-linked bond that terminates the April 28 and one double in june. At the Ministry of Economy, they said that since it is a voluntary exchange, for those who do not fall within the terms of bond payment will remain unchanged.

On behalf of the banks, they participated in Monday’s meeting, in addition to Cesario, Javier Bolzicothe Association of Argentine Banks (Adeba), Gustavo Manriquez (Bank Macro), Leticia Canclini (Santa Fe Bank), Fabien Kon (Galicia), Alejandro Butti (Santander), Martin Zarich (BBVA), Oswaldo Parre dos Santos (Patagonia), Alexandre Ledesma (ICCB), Federico Mayor Bessia (HSBC), carlos heller (Credicoop), and Claude Canepa (Bank San Juan).

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