The government is considering the sale of new peso bonds due 2026 to public sector creditors, in an
attempt to swap
4 trillion pesos of debt (US$19.7 billion)
maturing in the second half of this year,
according to a senior government official.
Officials want to sell new bonds due in 2026 and 2027, lengthening the maturity curve of sovereign debt as a way of
sending a signal to the private sector
to extend its maturities as well.
Private investors
have another 2.8 trillion pesos of local debt maturing in the second semester.
Public sector holdings
represent
60
% of the debt
maturing in the second half of 2023. The new bonds would be inflation-linked or dual, similar to the instruments issued in the last auction on March 9.
A dual bond is an instrument in which investors receive the higher of the inflation rate or the exchange rate.
A spokesman for the Economy Ministry declined to comment.
Argentina has a $74 billion mountain of local debt to manage, with the largest amounts concentrated in the months leading up to
October's
presidential election .
That debt pile grows almost exponentially because many of its obligations are
tied to inflation exceeding 100%.
The Treasury swapped a total of 4.34 trillion pesos earlier this month for new 2024 and 2025 bonds, alleviating immediate concerns of a potential local debt default.
However, the country faces maturities with the private sector of $600 billion in March and around $1 trillion a month between April and June.
The economy ministry could issue a decree to force public institutions to exchange their holdings during the second half of this year.
This would make it possible to better accommodate interest rates with holders, the official said.
In general, public sector holders are expected to participate in debt refinancings, because they answer to Alberto Fernández.
NE
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