The Government began to face
turbulence
that made it difficult to obtain a loan from foreign banks and funds.
In the market, they argue that the fall in dollar bonds and the rise in rates abroad increase the cost that will have to be paid to access a
repo credit of more than US$ 1,000 million for one year, which will sustain reserves and improve the financial climate.
This Monday, the titles in dollars closed with drops of up to 2.5% and so far this month they have accumulated a setback of up to 10%.
For example, the GD30, although it closed almost neutral today at $34.40,
lost 8% in February
after a strong rise in January.
This bond is one of the workhorses that Sergio Massa chose to buy back debt and that the banks take as collateral.
In Economy they estimate that
for every dollar they receive from the repo, they must provide double the amount in bonds
at nominal value as support.
Thus, given the current price, the government
would have to deliver titles for US$ 4,000 million to obtain funds for US$ 1,000 million,
according to private calculations.
And if the securities continue to depreciate, the collateral asset must be greater.
"The fall in bonds increases the cost and they have to put up more bonds as collateral," said a former central bank official.
In a private bank, they agreed that "the lower the price of the bonds, the greater the need for guarantees to bring in new dollars."
Although the banks offered him US$2.5 billion, Massa
does not have enough bonds to buy that amount of dollars.
Not even with the repurchase of the US$ 1,000 million of debt announced last January, a goal that is difficult and means the sacrifice of reserves.
Economy notified days ago the intention to rescue another US$ 100 million, but this Monday
"very little" was bought
, according to official sources.
Hence, the Government let it be known that it is looking for a more modest loan than what it aspired to last year.
In the last hours, close to the minister they slipped that
a first repo is "imminent" and that there are 7 offers.
In addition to an
Asian institution, a New York entity, a large investment fund and a European bank
, three other proposals were added last week, which is seen in the market as an attempt to overcome the new obstacles.
"Massa defines"
, they clarify in their environment.
The head of the Economy announced this Monday that "
today, tomorrow and the day after" he is going to announce "strong" measures linked to fiscal matters, the accumulation of reserves and the "defense" of the value of Argentina's sovereign debt.
In the midst of the rise in Country Risk to 1,964 points, from the Palacio de Hacienda they acknowledge that there will be news about the loan "when it is a little more advanced."
Although the titles in dollars remain
20% higher than last year,
specialists believe that the cost of a credit "repurchase agreement" (repo) will be very high.
"In the repo, they lend you 50% of the market price of the bond, in this case they lend you 8% less and possibly, since interest rates have risen, they will also raise it for the repo," said another former official.
Gustavo Neffa, from Research for Traders, pointed out that "during January there was a
violent rise in the short tranche of the debt,
and especially bonds under foreign law, some information was leaked, with which you have the great rise that was anticipated , what you are seeing is a purge of prices and not even a repo can raise your short-term titles".
The other side of the repo is the increase in debt in dollars.
If US$3,000 million of nominal value bonds are delivered (to obtain US$1,000 million in cash), the stock of debt in dollars with private parties will rise by almost 3.5% (assuming that no guarantee is required) and if deliver US$ 6,000 million (assuming a maximum guarantee of 100%), the debt will increase 6.7%, according to Aurum calculations.
