The Government will face this Monday the interest payment of US $ 690 million to foreign private creditors. This is the first debt maturity of the year, corresponding to the second coupon for the new bonds launched after the exchange in September 2020, when securities were restructured under foreign law for a total of US $ 66,000 million.
The Central Bank transferred the funds to the Treasury account last Friday prior to the scheduled maturity for this Sunday, January 9, which had an impact on the reserves, but the operation will end on Monday, on the first business day of the week. “Funds roll in tomorrow (for this Monday) “, confirmed this Sunday official sources.
The payment will take placer amid renewed pressures from a group of tough bondholders (Argentina Exchange Bondholders Group), advised by the former lawyer of Paul Singer’s vulture fund, Dennis Hranitzky, who expressed concern last week about the level of reserves and the lack of an agreement with the IMF, which gives them more guarantees of collection from creditors.
“Despite a record harvest, decade-high prices, and a SDR windfall of $ 4.3 billion, Argentina ends 2021 with net reserves of US $ 2.6 billion. And it seems that the Central Bank decided to sell the gold“The bondholders said on Twitter, who in 2020 accepted the restructuring of the Minister of Economy, Martín Guzmán.
Lthe differences due to the level of fiscal adjustment revealed Wednesday by the official made the markets more nervous and they triggered 4% drop in bonds on the next two wheels. “You already had the impact on reserves on Friday. Then, the bonds come very penalized, it is positive that it is paid, but that does not change the trend“said the financial analyst Christian Buteler.
The cancellation will be the first of a run from this month to March. Between external bondholders and multilateral organizations, they add up to a total of US $ 4,883 million, of which US $ 3,895 million correspond to the IMF, a volume greater than the net reserves estimated by the analysts.
According to Guzmán’s calculations, the debt load -including the national private sector- is US $ 28,000 million in 2022 and US $ 30,000 million in 2023. Of that total, the lowest payments correspond to private bondholders after the restructuring that would have saved US $ 34.5 billion between 2020 and 2030.
That agreement generated amortization and interest payments of about US $ 4 billion from 2020 to 2024 and US $ 42.7 billion from 2020 to 2030, according to calculations by the Congressional Budget Office. It was through a “step up” scheme with increasing coupons from 2021 on a semi-annual basis, so the next one will be in July.
“En July the coupon structure begins to accrue a higher payment, something that can begin to put a floor to the bonds, but for now the main variable remains accumulation of reserves, because maturities can be paid as long as there is a surplus of reserves, which is not the case, “he said. Leonardo Chialva, director of Delphos Investment.
For analysts, this Sunday’s expiration is in a “rarefied” framework. “There are no problems for payment, but the equation becomes more meager without an agreement with the IMF and Guzmán’s poor presentation shows that the negotiation is not going very well, “he said. Gustavo Neffa, director of Research for traders.