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Freitag, 9. Oktober 2015

Gov’t bonds rake in 11.6 billion pesos

Friday, October 9, 2015

Gov’t bonds rake in 11.6 billion pesos

Third issuance this week after foreign-currency reserves drop due to Boden 2015 maturity
Argentina issued yesterday US$384.6 million worth of Bonad dollar-linked bonds due in 2017 and to be redeemed in pesos, followed by 8.3 billion pesos issued in Bonar paper, also due in 2017, for a combined total of 11.6 billion pesos in new sovereign bonds — the third issuance this week after the Boden 2015 payment.
The amount collected through the Bonar 2017 is higher than the three billion pesos initially expected but falls short from the revised 10 billion pesos target the government released yesterday morning. The same happened with the Bonad 2017, as the US$348 million collected was lower than both the initial US$500 million and the revised US$1 billion goals.
Argentina accepted a US$116.3 value per US$100 note of the Bonad 2017, receiving offers for US$446 billion and allocating US$384.6 billion. Meanwhile, a value of 99.40 pesos per 100 pesos note was accepted for the Bonar and offers for 11.1 billion pesos were received, finally allocating 8.31 billion.
This was the third bond issuance carried out this week after already having raised US$669.26 million on Tuesday though the Bonar 2020. The figure was higher than the US$500 million the government initially expected to issue but felt short from the revised US$1.5 billion target it then released.
The government had already carried out other issuances of the Bonad 2017, the last one in August. Nevertheless, back then the results were much better as US$1 billion was collected, 2.8 times higher than the US$500 million that were expected, with a value of US$106 per US$100 note.
Regardless of yesterday’s result, the country is likely to seek more loans in the near future.
Several key advisers of FpV’s presidential candidate Daniel Scioli, who currently leads polls for October’s presidential elections, have said that they favour taking on new debt in order to boost the Central Bank’s coffers while avoiding a large-scale devaluation.
While none of the two bond issues will have a direct effect on the Central Bank’s foreign currency reserves given that both are paid in pesos, new signs of concern about the monetary authority’s coffer were raised yesterday, as reserves only jumped US$50 million on the day in which the proceeds from Tuesday’s dollar-denominated Bonar 2020 sale came in.
A Central Bank representative told the Herald that most of the cash used to buy that bond, which sold US$669 million, came from local investors whose dollars were already in the country’s banking system, and thus counted as part of the reserves.
That means that very little of the US$4.7 billion lost on Monday following the US$5.9 billion payment of the maturing Boden 2015 bond was recovered, despite government optimism about reserves only dropping by half after the payment.
World Bank loans
Some relief, however, came with the confirmation of a series of loans from the World Bank, after Economy Minister Axel Kicillof met its Managing Director Sri Mulyani Indrawati in Peru.
The Economy Ministry said in a press release that US$1.5 billion from the World Bank would be coming into the country to finance seven projects this year. Overall, US$5 billion are expected until 2019.
As that money would be coming from abroad, it would also mean an additional source of dollars for the country’s Central Bank.
— Herald with Reuters

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