With a new debt tender, Martín Guzmán covered maturities and passed a key test for the Government

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The The Ministry of Economy managed to raise this Tuesday almost $ 98,000 million in the tender for five instruments offered in the market and Martin Guzman was able to successfully pass a key post STEP test for the Government. With this amount, it covered the maturities of October and, due to a conversion of dollar linked, it reduced by 45% those that had a term to November.

Hacienda had to pay this week maturities of $ 75,000 million. To cover this amount, it offered five instruments: Ledes December, January and February: Lecer to July and a linked dollar that expires in April 2023 for which it received more than 240 offers and ended up awarding almost $ 98,000 million, getting a 126% refinance rate.

In addition, he offered to reconvert an instrument dollar linked maturing in November for US $ 1.76 billion and US $ 976 million remained. With the conversion operation for a basket of two instruments (30% as of November 2022 and 70% in another as of November 2023). That is to say that with that operation he achieved reduce the November maturity by 45%.

What is the bomb that Guzmán had to deactivate

The multi-million dollar maturities of Treasury bonds this week had generated strong tension between the Central Bank and the Ministry of Economy, with a new wave of criticism from the hard kirchnerism a Guzman. They reproach him for not having foreseen that this situation may build pressure on the dollar.

However, in official dispatches they assure that the scheduling of this tender was always carried out in the same way so as not to overload the last week of the month with another tender. Therefore, in this case the Palacio de Hacienda asked the Treasury to transfer the balance to pay the maturities and This Thursday it will cancel the Central Bank in advance the $ 75,000 million in temporary advances.

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They understand that post STEP the market had “overreacted” to the defeat of the ruling party and that is why he waited until he re-accommodated. As an example they say that short CER titles reached 6% + CER the week after PASO; Last week they were awarded at 4% and that same instrument this Tuesday fell to 3.45%, which is the market price.

In addition, the dollar linked rate closed at 0.5% compared to the 1% it had awarded in mid-September, so the reading they make at the Palacio de Hacienda is that Rates were accommodated as volatility passed.

What was the result of the tender and what do you project for the short term?

For the tender this Tuesday 841 offers were received, for a total of $ 134,224 million. According to the final data, a cash value of $ 97,985 million was awarded. Of the total, 25% corresponded to instruments maturing in 2021; 34% with a term to 2022, and 41%, in 2023. There was no public participation: 90% corresponded to private local investors and 10% to foreign investors.

For next week a new tender is scheduled that, since there are no maturities within that period, whatever is achieved will go directly to finance current spending of the Treasury. For him last quarter of the year, Hacienda will face maturities for $ 900,000 million.

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