The National Treasury raised $375,121 million on Thursday in the last auction of public securities in February and obtained extra financing for nearly $60,000 million since its maturities reached $316,588 million, the largest amount so far in the administration, for which achieved a refinancing rate of 118%.
In this way, added to the extra $85,000 million that it had had in the previous call, it closed February with an extra financing of $145,790 million, which represents a refinancing rate of 143%, the Ministry of Economy reported on Thursday.
“It was the largest amount of maturities for a tender so far in the management and a refinancing rate of 118% was achieved“, explained that portfolio after the last exit to the market of the month.
TENDER RESULT: ECONOMY COVERED ALL MATURITIES AND OBTAINED EXTRA FINANCING
After the last tender of the month, the refinancing rate was 143%, with maturities totaling $316,588 million, the highest amount so far in the term. pic.twitter.com/hvtMmm0SbU
— National Ministry of Economy (@Economia_Ar) February 24, 2022
At the beginning of the month, maturities totaled close to $560,000 million, including those of February 28 that were moved to March 2 due to the Carnival holiday, but in the first tender of the month it carried out two asset conversion operations and reduced said amount by $244,156 million.
Thus, in the first two months of the year, the Treasury accumulated net financing of $285,405 million, which implies a refinancing rate of 145%.
The menu of instruments offered in Thursday’s auction was made up of 9 titles with maturities in 2022, 2023 and 2024.
A new Treasury Liquidity Letter (Lelite) was issued with maturity on March 31 -subscription for Mutual Investment Funds only-, three discount bills (LEDE) were reopened with maturities on April 29, June 30 and On July 29, a new LEDE was issued with maturity on August 31 and a new letter adjustable by CER (Lecer) with maturity on February 17, 2023, instruments that are part of the Market Makers Program, which allows you to extend your subscription to retail investors in the days after.
The fixed-rate bond (Bonte) maturing on May 21, 2022 was also reopened, and two CER-adjustable bonds (Boncer) maturing on August 13, 2023 and July 26, 2024 were reopened.
In total, 1,319 offers were received, which represented a total of VNO $454,936 million, awarding an effective value of $375,121 million.
Of the total financing obtained, 57% corresponded to instruments maturing in 2022, 42% in 2023 and the remaining 1% in 2024.
Likewise, 57% of the awarded amount was in fixed-rate instruments, and the remaining 43% in CER-adjustable instruments.
Within the framework of the Market Makers Program, the Second Round will be held on Friday where bids can be received and awarded for up to 20% of the total nominal value awarded in the tender on Thursday.
The next tender will take place on Wednesday, March 16, as reported in the preliminary tender schedule for the first half of 2022.
The success of the first operations of the year is in line with the Government’s objective of financing a fiscal deficit of up to 2.5% of GDP in 2022 with a greater placement of debt in pesos and a sharp reduction in monetary issuanceas stated in the principle of agreement for an Extended Facilities program with the IMF to refinance the US$ 45,000 million debt with the organization.
According to what was announced by the Minister of Economy, Martín Guzmán, the Central Bank (BCRA) will reduce the monetary issue of assistance to the Treasury from 3.7 points of GDP in 2021 to only 1 point in 2022.
About, Economists consulted by Télam pointed out that this could be achieved with a combination of better interest rates by Economy and coordination with the BCRAwhich could include changes in its regulations to transfer part of the money that is currently immobilized in Leliqs and Passes to Treasury securities.
According to calculations by the consulting firm Equilibra, Economy must get between 1.8 and 2 points of the product in the local market to meet the deficit goal, which at today’s values is equivalent to about 1.2 billion pesos.
This is equivalent to a rollover of 117% of its debt maturities in pesos, a goal that for now is being exceeded since the rollover in the first two months is 143%.
According to the consultant’s calculations, close to $550,000 million that banks have today deposited in Liquidity Letters (Leliqs) could be turned over to public securities if rates are improved or current regulations are modified in exchange for integrating them as bank reserves, a provision that the Central enabled last year to encourage banks to provide funding for government tenders.
“If the Treasury managed to take part of that liquidity that is in the banks today, it would be a more reasonable way of financing itself than with issuance. At the same time, it would be a relief for the BCRA, which would see its debt level reduced,” he told Télam. director of macroeconomic analysis at Equilibra, Lorenzo Sigaut Gravina.
For his part, the director of the Center for Argentine Political Economy (CEPA), Hernán Letcher, told Télam that “the money to finance the deficit is there” and that if the Central advanced “with some modifications in the current regulations, that process could be accelerated. “.
“The financing scheme contemplated in the agreement with the IMF has not been resolved, but it is achievable, and it goes hand in hand with the plan to reduce the deficit,” Letcher assured.
