First debt swap of 2023 ends with 67% adherence

The Economy Ministry considered the debt swap “successful” as it refinanced debt for some AR$3 trillion and reduced maturities for the first three months of the year.

The Economy Ministry refinanced its maturities for the first three months of 2023 from AR$4.3 trillion to AR$1.41 trillion in what it considered a “successful” debt swap. The swap, which was offered on December 29 and due Tuesday, had an adherence of 67.2%.

The Finance Department highlighted the participation of private banks such as Santander, Galicia and, to a lesser degree, Nuevo Banco de Santa Fe, San Juan and Macro.

The Treasury had to face maturities for AR$1.1 trillion in January, AR$1.2 trillion in February and AR$2 billion in March. After the swap, the maturity prospect is AR$390 billion, AR$420 billion and AR$60 billion, respectively.

The initial offer of the debt swap, made for holders of eight bonds, consisted of two different “bond batches”: one made up of LEDES with maturities up to June 2023, and another one consisting of “dual bonds” maturing up to February 2024. 

Dual bonds are financial instruments in which the investor receives a payment that is adjusted through the best option between a fixed interest rate in pesos or the official US dollar exchange rate. This allows investors to hedge against both rising inflation and any potential exchange rate devaluations, because the investor can choose what yield to receive at maturity.

One day before the due date, the Economy Ministry added another option: the LECER bond X16J3, an inflation-adjusted bond that matures in June 2023. However, this alternative was only available for holders of LECER X20E3 and X17F3, two inflation-adjusted bonds that mature in January and February 2023 respectively.

The next bond auction is taking place next on January 18.


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