After the debt swap, the country risk fell from 2,100 to 1,083 basis points. It was the opportunity for a “new beginning.” But there was no not even honeymoon and less than a month after the restructuring it already exceeds 1,400 basis points.
Country risk is the JP Morgan indicator that measures the excess rate that Argentina pays for borrowing. On Wednesday it closed higher at 1,392 and this Thursday it is already up 1.3%, to 1,410 basis points. It is 30% more from the post-exchange.
The rate of return of the new bonds had started at 11.5% and today it already exceeds 15% in some cases. Since September 4, the date on which the old bonds were exchanged for the new ones, the dollar securities that emerged from the debt swap decreased every day except for just one day. So, according to the analysis made by the investment bank Morgan StanleyIt would be the worst start to an emerging market restructuring in more than 20 years.
And they continue to give the new NY law bonds before the local opening. EMBI + already above 1400 bps.
Clearly it is a matter of economic policy focus and negative expectations repeatedly reconfirmed. If not surprised by the positive, this can continue to deteriorate.
– Gabriel Caamaño (@EcoLedesma) September 24, 2020
At the start, the bonds showed falls of less than 1%, but fell 20% compared to a month ago.
“Clearly it is a matter of focus on economic policy and recurrently reconfirmed negative expectations. If they are not surprised by the positive, this may continue to deteriorate”, warned economist Gabriel Caamano on Twitter.
Argentine stocks on Wall Street, meanwhile, had mixed results. Some managed to rebound, such as IRSA (+ 10%) and Loma Negra (+ 1.2%), and the rest fell with YPF and Transportadora de Gas del Sur in the lead, with reds of more than 4%.
The alternative dollars, which on Wednesday reached a gap of almost 95% with the wholesale dollar, started at $ 135 for the MEP or Stock Exchange dollar and $ 148.6 for the cash with liquid, while the official wholesale (that operate companies and banks) was up 6 cents to $ 75.77.