02/11/2020 - 18:51
- Clarín.com
- Opinion
According to the irreplaceable Wikipedia, the "trial and error method" is to try an alternative and verify if it works. If so, you have the solution, otherwise, you try a different alternative.
In the Government they deny with emphasis that this is the method applied by the minister Martín Guzmán to face the renegotiation of the debt although, to count by the facts of the last days, it seems to him enough.
The decision to reschedule until September the payment of the capital of the AF20 or Dual bond (colloquially baptized by the market as the "Alberto bond", by initials) opened a new instance that gave ground with an idea emerged from Economy that held that Bonds in pesos issued under national legislation would not fall within the reperfilation scheme that would be in gestation for dollar titles and with foreign legislation.
With the AF20 that idea was left behind and the paradox was consolidated that the Buenos Aires governor Axel Kicillof paid the capital of a dollar bond (the total maturity was US $ 250 million) and Martín Guzmán, a few days later, there rescheduled another in pesos.
The compulsory postponement of the payment of the AF20 writes a new chapter of a powerful and difficult-to-resolve dilemma facing the Government: debt maturities in pesos up to June total $ 850,000 million , a true mountain of pesos.
That dilemma, in the case of the Dual bond, represented the possibility of having to issue $ 113.00 million. But that was not going to happen after President Alberto Fernández said on the weekend: "We are not going to broadcast crazy."
His words came after the failure of the exchange offered by the Treasury, which only achieved 10% membership.
Guzmán returned to the load and called for a tender to place three bonds (tied to inflation, the interest rate and the dollar) to get pesos and thus compensate those that could be dumped into the market by the AF20.
Economy did not officially give the result of that bidding but in the financial market it was said that the purchase of those bonds would cover between 40% and 50% of the maturity of the Dual that already had 10% of the previous week. To obtain funds for 60% of the maturity was not to celebrate?
Obviously not, or at least that is what the President understood that on Monday night he made the decision to reschedule the AF20 before the alternative of having to issue too many pesos and hardening his speech in front of the bondholders.
The Ministry of Economy issued a statement with a tone of strange hardness in Martín Guzmán with two paragraphs to highlight.
One is clearly political and not for that reason by affirming: "This Government is not going to accept that Argentine society is held hostage to international financial markets , nor is it going to favor speculation over people's well-being."
An implicit message in that sentence could be: I will not issue to pay external creditors after suspending the retirement indexation formula to contain a portion of public spending.
The other prominent paragraph was, when talking about the failed exchange of the AF20: "There was cooperation from local holders, there was no cooperation from a group of foreign funds that have the highest ownership of the instrument."
Thus Guzmán's statement referred, without mentioning it, to the Templeton fund, an important holder of Argentine debt against which the Government tightened the positions.
Will it have to do with the arrival of the IMF mission (Guzmán achieved a good dialogue with Kristalina Georgieva) and after the agency proposed applying a strong take-off to the bondholders?
It is clear that the Government made its bet to get a postponement of payments to the IMF (in 2022 and 2023, US $ 44.5 billion expire) before a good relationship with private creditors.
And among the paradoxes of these days is the fact that Kicillof remains as the orthodox who pays the maturities in dollars and postpones the payment of a compensatory to the teachers while Guzmán appears as heterodox defaulting a payment of capital in pesos and hardens with The bondholders.
The phantom of a large issuance of pesos in the short term will continue, at least, until the end of March, when the maturities reach US $ 44.5 billion, but it can hardly be reached by acting on "trial and error." The fall of the dollar bonds on Tuesday show again that the surprising changes have costs and that the negotiation of the debt entered into a stage of definitions.
Probably, the curtain will begin to run with the presence of Martín Guzmán in Congress who, without "power point" or cadres with precise numbers or commitment of goals, will provide legislators with an overview of the "fiscal path" that he plans to reach the balance of public accounts in the medium term.
The compulsory reprogramming of a bond in pesos adds uncertainty about the menu of options available to the economic team to transit until March 31, when the Government plans to terminate the debt negotiation.
In the case of the AF20, it chose the least expected option by the market operators, and shortly after walking the costs will be known.
