Investors offered almost 6 times the amount that Caputo raised

According to the Ministry of Finance, Bonar 2027 was awarded at an effective rate of 5.89% annually (5.74% nominal) and received offers for US$ 868 millionleaving out more than 80% of the demand. The new title under Argentine law expires in October 2027, coinciding with the presidential elections.

“The Treasury inaugurates a new vehicle to accumulate dollars taking advantage of the greater availability of dollars in the local market and it manages to do so at a rate of just below 6%, in line with what the Bopreales (Central Bank securities) yield that also mature in October 2027,” said Javier Casabal, economist at Adcap.

The Ministry of Economy announced on Tuesday the launch of Bonar 2027 in its biweekly tenders for an amount of up to US$ 150 million, expandable to US$ 250 million in the second round on Thursday, with the objective of raising a total amount of up to US$ 2,000 millionsomething that until now could not be achieved in previous attempts.

The dollars will be used to pay the capital of the bonds in hard currency that mature on July 9 for US$2.7 billion. If interest is added, the commitments total US$4.3 billion. Thus, they would seek to avoid a REPO loan with international banks, like the one the government used to cancel January payments.

With a country risk still high (above 500 points), which prevents returning to the markets, Luis Caputo tries to take out debt in foreign currency initially in the local plaza, where the “argendollars” rest. It had already done so in December, when it launched Bonar 2029 and placed US$ 1,000 million, at the cost of paying a high rate of 9.25% annually.

Now, the Minister of Economy pointed to a bond with a shorter term (one and a half years) and dosed emissions to avoid the risk of insufficient demand. “It is a good rate, due to the characteristics of the bond it has an interesting potential captive demand, they took advantage of it,” said Gabriel Caamaño, director of Outlier.

For the economist, the auction came out in line with the rates of corporate bonds (ON) and the provinces. Today Pluspetrol placed US$ 167 million at 6.5% annually for three years. Since the October elections, these emissions have accumulated US$ 10.7 billionaccording to Romano Group estimates. Caputo went out to compete for those dollars.

“They jumped in headfirst, evidently there are many dollars left over without destination in the market“said one analyst. “We will have to see tomorrow if, at this same price, which is above what we expected, there is still demand willing to validate it. If so, it is possible that part of the demand will come from foreign investors,” Casabal said.

On the peso side, the Ministry of Finance also offered securities in pesos in this Wednesday’s tender, in which it placed a total of $6.74 billion and received offers for a total of $8 billion ahead of a week in which $7.2 billion expires. “This means a rollover (refinancing) of 93.32% on the maturities of today’s date,” Finance reported.

One of the novelties of the auction was that there were no short titles in pesos at a fixed rate and that most of the payments could be renewed, without raising the rates, as had happened in previous placements. 64% of what was awarded was to the inflation-adjustable bill (Lecer) maturing in Maywhile the rest were placed in longer terms.

“This confirms that there were conditions to reduce fixed rates and include instruments in dollars. Thus, after three more aggressive and contractive tenders in a row, more liquidity was provided, a sign that they are trying to lower volatility and short-term interest rates: they are going to inject $500,000 million of liquidity on Friday“said Pedro Siaba Serrate, chief economist at PPI.