The Economy Ministry secured AR$227.13 billion in its bond auction today in the first round of April, where it faced maturities of AR$189.4 billion.
“This is the auction with the third-highest number of bids so far this year,” Finance Secretary Eduardo Setti tweeted today.
This way, the government obtained an extra net financing of almost $40 billion, a refinancing rate of 120%. According to Setti, “96% of that amount was provided by the private sector.”
“Thus, the rollover of the private sector was 123%, while that of the public sector was 105%,” Setti said.
“Of the total cash value awarded, 85% was from the private sector, while the remaining 15% was from the public sector. With this result, net financing so far this year amounted to almost $520 billion,” Setti added.
In a context where the blue-chip swap rate was surging to AR$421, the government offered a dollar-linked bond to investors, even though the International Monetary Fund (IMF) had advised against its “excessive issuance” in the fourth review of Argentina’s economic program.
The “menu” consisted of seven bonds with only one new bond, the 2023 Letra de Liquidez which matures on May 19. The other six bonds are re-issued, including inflation-adjusted Letras del Tesoro which mature on July 18 (X18L3) July 31 (S31L3), and September 18 (X18S3), and an inflation-adjusted Bono del Tesoro that matures on August 13 (T2X3).
Two of the bonds are dollar-linked: a Bono del Tesoro that matures on July 31 (T2V3D) and another that matures on April 30, 2024 (TV24D).
The IMF had also discouraged “overly onerous interest rates” — one of the bonds had a 130% annual interest rate.
According to the broker SBS, the board of the Central Bank will decide tomorrow whether they will increase the reference interest rate “amid the high inflation and currency volatility.”
The next bond auction is scheduled for April 26.