Government gets AR$464 billion in ‘surprise’ bond auction

The purpose of the bid was to finance the measures announced last week to counterbalance the devaluation’s impact

The government raised AR$464 billion through peso securities in the local market in an off-schedule auction that took place on Friday. The goalwas to finance the relief measures announced last week to counterbalance the economic impact of the 22% devaluation the government implemented the day after the primary elections.

Among the measures announced by Economy Minister Sergio Massa last Sunday are bonuses and loans for workers, pensioners and welfare recipients, as well as price freezes and tax breaks for farmers and the self-employed, among others.

“A new auction was done today outside the usual schedule and without scheduled payments, in a favorable market context and in view of the growing demand for local financial assets, for a total of AR$464.01 billion,” Finance Secretary Eduardo Setti said on Friday on X (formerly Twitter).

“Almost all of the awarded bids came from the private sector, with the participation of a broad base of investors, which made it possible to obtain financing in excess of the expected $100 billion,” added Setti. He also said that, unlike standard auctions, “no short-term instruments were offered, but rather the investment options aimed to extend the curve with a balanced distribution of maturities.”

The Finance Ministry offered four instruments — two were inflation-adjusted (Boncer) maturing in May 2024 (T6X423N3) and on 14 October 2024 (T4X4); one was tied to the official dollar rate (T2V4), maturing in September 2024; and a Dual Bond, adjustable for inflation or the official exchange rate, whichever is higher on the maturity date, to be paid in August 2024 (TD624).

“The tender marks the return of dollar-linked bonds, which had not been offered since July, and dual bonds, which hadn’t been offered since June,” the Grupo SBS broker noted in a report.

Economist Leandro Ziccarelli said on Twitter that the collected amount is “a little more than half of what the measures announced over last  weekend will cost.”

As per the current schedule, the next auction will take place on September 14.


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