Argentina awards 750 mln dlr in tender for conversion of bonds into dollars

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Argentina awards 750 mln dlr in tender for conversion of bonds into dollars




Facade of the Central Bank of Argentina (BCRA)


© Reuters / AGUSTIN MARCARIAN
Facade of the Central Bank of Argentina (BCRA)


BUENOS AIRES, Nov 9 (Reuters) – The Argentine government awarded $ 750 million on Monday in a transaction to convert securities into foreign currency due in 2030 and 2035, it was officially reported.

370 offers were received, awarding a total equivalent in pesos of 43,038 million for the conversion of 500 million dollars from the ‘AL30’ bond and 250 million dollars for the ‘AL35’ bond, added the Ministry of Economy. He argued that the operation carried out with “public debt instruments denominated in foreign currency, with identical characteristics to those used in the exchange of debt in dollars under local law, which (which) implies that holders of eligible securities can use their instruments in pesos as a payment and subscription mechanism “.

This securities conversion operation has the objective of deepening the normalization process of the market for financing instruments in local currency.

Analysts pointed out that this tender will make it possible to elucidate what exchange rate investors are willing to pay to exit their positions. Operators agreed that the auction was prepared for large investment funds that have been struggling for months to leave the Argentine market.

After the auctions, during December financial needs in pesos were reduced by a total of 22,610 million and during 2021 by 20,428 million.

Argentina has been mired in an economic crisis since 2018 and is heading for its third consecutive year of recession, with a contraction close to 12% in 2020, impacted by the coronavirus pandemic.

The South American country is also struggling with a currency crisis, for which it imposed strict capital controls, after recently emerging from a sovereign default after restructuring more than $ 100 billion in the hands of local and international creditors.

“Steps consistent with a comprehensive approach to restoring public debt sustainability are taken, a process that involved the execution of two debt swaps in foreign currency with acceptance percentages higher than 99% in both cases, and the conversion of debt securities. short-term denominated in dollars to pesos for a total of 6,600 million dollars, “he said to the Treasury portfolio.

– Exchange rate: 1 dollar = 79.35 pesos

(Reporting by Jorge Iorio; Written by Walter Bianchi and Jorge Otaola)

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