The government obtained 64% acceptance in the exchange of debts in pesos

The government succeeded in swapping debt bonds for $4.34 trillion out of a total of $7 trillion, reaching 64% of the stock of eligible securities and extending the second quarter maturity curve to 2024/2025.

“For the April, May and June maturities, the acceptance level reached 61.5%, while for the March maturities (including the operation carried out in January), the participation exceeded 72%. In short, the percentage of membership has reached 64% of eligible titles”, they explained to the Ministry of the Economy.

According to official sources, the financial entities with the largest participation were Banco Nación, Banco Provincia, Galicia, Santander, Credicoop, Banco Ciudad and ICBC.

“The profile of the holders concentrates a significant participation of mutual funds and treasuries of companies, which, by their business flows, maintain a short-term investment horizon,” added the sources.

The first basket of bonds from which holders could choose included three bonds indexed rising prices, with three different maturities: the April 14, 2024 (plus a rate of 3.75%, which represents 30% of the total of this basket), the October 14, 2024 (additional commission of 4% and which represents 40% of the total of this first exchange option) and February 14, 2025 (4.25% interest on the CER, the remaining 30%).

The alternative was a menu with the bono “double” which was discussed by the opposition, as they considered it a kind of “currency insurance” with an option to sell to the Central Bank. 30% of the second basket will be made up of the “dual” which will expire in February 2024. the rest will be inflation-indexed (also for October 14, 2024 there February 14, 2025).

The bonds eligible for the operation were eight variants which mature between March 25 and June 30 and which include fixed-rate discount bills and CER bonds, as well as a dollar-linked bond which expires on April 28 and a double until June. At the Ministry of Economy, they said that since this is a voluntary exchange, for those who do not fall within the bond payment terms, they will remain unchanged.

The tender took longer than expected. At around 4:30 p.m., Finance Secretary Eduardo Setti said via Twitter that “at the request of three financial entities and a Mutual Investment Fund, the closure has been extended until 5:00 p.m.”, instead of the usual 3:00 p.m.

In addition, this Thursday, the Board of Directors of the Central Bank approved a regulation that will allow the inclusion of bonds resulting from the exchange in the list of public securities that banks can use to register as compulsory reserves before the BCRA. .

At the Ministry of Economy, they anticipate there will also be a reopening of swap options for the more than $800,000 million that expires in March. The payment obligations for this month had already been part, strictly speaking, of the first conversion of the year, in January, and which included the entire first quarter.

There is an open window for the Treasury after June to work on a differentiated plan for intrastate debt. For the conversion operation announced today, they specified, the public sector will have the same conditions as the private sector.

The universe of securities taken into consideration for the exchange totals, they estimated in the official dispatches, more than 7 trillion pesosalmost half of which are in private hands and the rest in the public sector investment portfolio.

This Thursday morning, the Secretary of Finance Edward Setty had estimated a level of support close to 50 percent. “After the hard work carried out by the economic team led by Minister Sergio Massa and the various players in the market and the financial system, whom we thank for their participation and support, we are starting the operation to convert the debt instruments of the Treasury that will allow short-term compensation of more than 3.5 trillion pesos”.

“With this process of reorganizing and extending the sovereign peso curve, we will be able to preserve debt sustainability. This highly relevant operation is the top priority of this administration, the results of which will help ensure greater confidence, predictability and stability,” Setti said.

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