Since February, after the unsuccessful attempt to exchange the dual bond and implement technical changes that facilitated a more favorable response from the market, the Finance Secretariat of the Ministry of Economy promoted various exchange operations through which it reduced the debt by 52.4% short-term public in dollars.
Specifically, the pesification through different operations resulted in exchanges of instruments denominated in dollars for US $ 7,839 million, of which the equivalent of US $ 1,558 million correspond to the Dual Bond FY20, US $ 5,881 million to LETEs and US $ 400 millions to LELINKs.
Short-term debt is the one that has maturities in the next 12 months. But even if the total stock of public debt under local legislation is observed, the report of the Ministry of Finance highlights that the National Treasury reduced the participation of sovereign instruments denominated in dollars by 17 percentage points.
In a report prepared by the Secretariat in charge of Diego Bastourre, they highlighted that they also achieved an extension of terms in the maturity profile.
In the tender for debt in pesos this Tuesday, the Government managed to place some of the debt it offered for a three-year term and, according to official sources, they are evaluating from September onwards to see the possibility of issuing longer terms.
In relation to the net emissions of July, the report highlights that they achieved a 119% roll over. In other words, of the maturities that occurred during the past month, funding was achieved for the total and up to almost an additional 20%. Thus, net financing was $ 38,993 million in July.
For the remainder of the year, in the last five months of 2020 there are debt maturities in pesos for approximately $ 1 trillion, with maturities mostly concentrated in the last two months of the year (November 29% and December 25%), that is, for $ 289,249 million and $ 246,293 million, respectively.
The report recalls that the percentage of debt renewal that matured throughout the year increased. In January it was 58%, in February 46%; in March, 71%; in April, 97%; in May 137%; in June 92%; and in July 119%.
It is also recalled that in the process of “normalization of the local market”, work was also done on the design of the exchange proposal under local law, which provides for equitable treatment in relation to the conditions offered (both current and future) to external holders. .
Within the swap under local law, two options were incorporated to try to pesify the debt in dollars, for about US $ 41,000 million. Two CER-adjustable peso securities are offered maturing in 2026 and 2028.
On the contrary, and an element that was criticized by the opposition, the Government plans to make three debt issues in dollars for US $ 1.5 billion in total. Through these tenders, it seeks to release some investment funds, such as Pimco, which seeks to get out of the debt in pesos, and that this migration does not end up impacting the price of the dollar counted with settlement.