07/27/2021 6:00 AM
Updated 07/27/2021 6:00 AM
In the financial market, some concern was raised about the way in which the Banco Provincia de Buenos Aires (Bapro) resolved the payment of an interest coupon on a Negotiable Obligation Argentine law of the
“peso link” type
(not dollar link) issued in 2018.
The payment was made last week
absolutely in pesos
, when the issuance prospectus said
At the time of offering this debt paper, Bapro established that if the ON called
"Class VIII Debt Title at a variable rate with a nominal value of $ 2,928 million"
issued on April 18, 2018 is registered in the Caja de Valores de Buenos Aires , interest is paid in pesos,
but if said securities are registered in Euroclear, the corresponding interest is paid “in dollars,
an Exchange Rate equal to the average of the last 3 days of Circular A 3500 of the BCRA (the wholesale exchange rate ).
To guarantee payment in dollars, Bapro promised, in the issuance prospectus, the following:
"The issuer expressly waives the powers established in Article 765 of the Civil and Commercial Code of the Nation and states that the obligation to pay in Dollars Americans assumed by the Issuer in relation to the payment of the principal and interest of the Securities should be considered as an “obligation to give money” and it cannot and should not be considered as “to give amounts of things” as mentioned in said Article; Considering, likewise, that the Issuer will not be released from the obligation to pay in US dollars assumed in the Securities by “giving the equivalent in legal tender”.
The truth is that the interest coupon payments were paid as the prospectus said (pesos in Buenos Aires, dollars abroad) even when an interest coupon was paid in
April of this year
But this month that policy was modified.
Bapro they officially said this
“These are Negotiable Obligations in pesos issued by Banco Provincia in 2018. Although the prospectuses of the securities provided for the possibility of being paid in dollars if they were deposited in Euroclear and Clearstream, they were paid in full in pesos according to to the regulations in force at the time of the service expired on July 19, 2021. The exchange regulations to date indicate that debts prior to the reimplantation of the regulations started in September 2019, can only be paid in dollars if they are accounted for and registered in that coin. Therefore, according to this regulation and the interpretation that the BCRA makes of it, access to the exchange market is not enabled to settle these bonds that are accounted for in pesos,despite the fact that the bank has enough dollars in its own portfolio ”.
Indeed, these debts are recorded in the balance sheets as a
liability in pesos
In April of this year, the exchange regulations were the same as those that apply today, but at that time Bapro paid pesos and dollars, and now only pesos.
consulted by this newspaper subscribed to Bapro's position:
“It is a ON in Argentine law pesos.
There is no access to the Single Free Exchange Market to pay local debt in pesos "
And regarding the clauses included in the issuance prospectus, they pointed out:
" Those clauses do not apply, they are from when there were no capital controls.
If the ON is pesos and Argentine law, it is not appropriate for them to access the official market ”.
For now, according consultations with operators in the market, there is something resembling a
by a breach in the currency of payment. But there is some controversy, expectation of what can happen later. "The payment was for little money, I estimate that less than a million dollars, but it seems to me that Bapro is speculating for when the final payment of the ON occurs, for about 2,928 million pesos,
equivalent today to 30 million
dollars at the official exchange rate ”
pointed out a banker.
These “peso link” NOs had some popularity until the devaluation of April 2018. They were issued in pesos and with a high coupon.
Investors earned that coupon minus the devaluation.
The business closed well if the peso did not collapse.
A way to carry trade
with private debt, and not with the Lebac of the Central Bank.
From that time, “peso link” ONs issued by, among others, YPF, Tarjeta Naranja, and Macro and Hipotecario banks.
In all cases, with coupons of
15 or 16% per year,
or even something more.
In fact, most of the creditors of these ONs are
and according to their convenience, they have them based in Caja de Valores or Euroclear. Perhaps speculating with that is that Bapro made the total payment only in pesos.