Gustavo Bazzan
07/06/2020 - 6:30
- Clarín.com
- Economy
- Economy
The new exchange proposal that the Government is offering to bondholders who have debt bonds issued in dollars under foreign law in their possession received strong support from Luis "Toto" Caputo, former secretary and finance minister of Mauricio Macri and also a former BCRA holder.
On his personal Twitter account, Caputo wrote last night, a couple of hours after the government released the content of the offer:
“Very good exchange proposal. With NPV levels acceptable to creditors and according to the country's possibilities. Very good incentive design, discouraging being holdout. A fair proposal that should have a high participation ”.
The tweet was supported by Caputo's right hand as he passed through the government, Pablo Quirno.
Another former Macri official, Alfonso Prat-Gay , was more cautious:
“It was the fourth" last proposal ": Promise of payments for US $ 15,000 million more than in the first. More than a global precedent, a manual of how NOT to negotiate. ”
On the apparent counterpoint between Caputo and Prat-Gay, Matías Carugati, an economist at the consulting firm Seido, said:
"On the subject of exchange. The last two RTs (@ totocaputo6hb and @alfonsopratgay) are not contradictory, but should be read together. It is a reasonable offer and it is the result of a wrong strategy ”
Diego Sacerdote , financial markets analyst, stated:
"It is not a minor detail that Toto Caputo supports the exchange offer. A benchmark in the financial world and highly respected by international funds. ”
The NPV to which Caputo refers is the value, in dollars, of the proposal once the new bonds are listed. The NPV rose from $ 41 from the first known offer in mid-April - which was rejected by 85% of bondholders - to the current $ 54 of the proposal that was released last night. In the original offer, Minister Martín Guzmán intended to achieve savings between principal and interest of 65,000 million dollars, taking into account the debt in local and foreign law. Now, that saving would reach 50,000 million dollars, according to calculates Federico Furiase, economist at the Eco Go consulting firm.
Both the Government and financial analysts and also the bondholder groups calculated the value of the proposal, assigning the new bonds an exit yield of 10% per year . It would be something similar to the "country risk" that Argentina will have (10% is equivalent to 1,000 points ) the day after the new bonds are in the hands of the bondholders. Today the country risk is at 2,544 points.
Of course, for this risk of 1,000 points to be maintained and even to fall, Argentina must show not only an acceptable level of adherence to the swap, but a credible comprehensive economic program for creditors, for markets in general and for the International Monetary Fund. .
The market reading is that if Argentina manages to close a good swap, the next, and immediate, step is to prepare a comprehensive economic plan for the post-pandemic and almost at the same time go to the International Monetary Fund not only to restructure the terms of the debt of 47,000 million dollars that it maintains with that agency, but also to seek approval of the plan.
Markets are now expected to speak.
