08/13/2020 - 16:13
When the Argentine government is expected to make its fifth and final debt exchange offer official before the SEC (United States Securities Commission), the bondholders who were in the debt negotiation (and also analysts who closely followed the entire process ) asked Martín Guzmán for an economic plan .
In addition, they mentioned that at some point the issue will have to be resolved in the exchange market, with a dollar today that for some is somewhat behind , although they do not believe that a devaluation will help in the current context.
Under the slogan "Argentina's debt restructuring and economic prospects" , and moderated by Siobhan Morden, from Amherst Pierpont, Andrés de la Cruz, from Cleary Gottlieb (the study that advises the country in the exchange of the debt) and Ian Clark, of White & Case, the buffet that accompanied part of the bondholders.
From the economic point of view, there were Robert Koenigsberger, from the Gramercy fund, Patrick Esteruelas, from EMSO, and Juan Manuel Pazos, from TPCG Group.
Faced with the question of what risk there was of a new debt crisis in 2024 (when payments begin to be more bulky), one of the attendees said that "it will depend on doing things well in the next 18 months . "
“You need a consistent fiscal and monetary program, and do something with the foreign exchange market. If this is done well, we do not see that Argentina can go to a crisis in 2024. If nothing is done, there we can have a problem ”, he described.
“ I don't think Argentina has a plan to have the dollars . The restructuring created a necessary scenario, but it is not enough. We would have to see a program, a model, to see how they are going to get dollars, "said another of the analysts who spoke via Zoom.
Regarding the exchange market and the dollar, he acknowledged that “if you try to depreciate, the situation will only get worse. We saw it in 2013 and 2014, depreciation accelerated ”, he recalled. However, he said that at some point the exchange gap and the controls that exist will have to be resolved. "I was hoping the IMF could help on this point," he added.
They also talked about the fiscal result, the need to alleviate the consequences of the coronavirus was recognized, but that this will leave Argentina with a fiscal deficit of no less than 8% or 10% of GDP this year. "The next one will probably be 3.5% of the product and only in 2023 or 2024 could there be equilibrium, at the earliest," added an analyst who closely follows the Argentine case.
The other aspect had to do with the negotiation with the International Monetary Fund, which Guzmán said will begin in the next few weeks but that could take several months, until the first of 2021. “The agreement with private parties provides the framework to negotiate with the IMF and with the Paris Club ”, said another of those attending the virtual conference.
Two of them agreed on a vision: that Argentina will seek a short program with the IMF, lasting 12 months , which will only serve to repay the debt that exists with the organization, which is about US $ 49,000 million (between capital and interests).
“A 10-year program implies conditionalities and structural reforms. That is why I think they are going to agree to a 12-month period, to repay and give some kind of debt relief ”, he mentioned.
Another point about which there was concern was listening to the parties' lawyers talk about what was agreed between bondholders and the economic team in relation to the redesignation of the bonds and the aforementioned "PACMAN strategy".
"We hope that the solution found in Ecuador and Argentina can be good models for the international financial architecture," specialists were heard at the event that was closed to the press but to which Clarín had access.
“In the past the minimum participation threshold served a bit in that sense. The redesignation was used in Ecuador and now in Argentina. The result that emerged is a balanced point. I would hope that this will be used in the next restructurings ”, they mentioned.