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Debt: 15 banks present emission offer
Ambito Financiero
July 23, 2010

It will be decided in function of higher market rises
At Economy, they argue that "there are no urgencies"

by Guillermo Laborda

At the Economy Ministry there are already 15 offers from banks to emit debt in different markets. The official strategy is not to rush the decision: they see that the market is tending higher and in parallel there is no urgent need for funds. It even came out from sources at the Palacio de Hacienda that "the decision is not tied to the Boden 2012 payment at the beginning of August." It's that an alternative would be to unite the launch of the US$2.3 billion that will be sent to investors in a manner that would give them a channel for reinvestment. But on the other side is the official plan that this payment serve for investors to push yields down even further and that, definitively, pushes down the cost of financing.

On the 10th floor of the Palacio de Hacienda, in the offices of Finance Secretary Hern n Lorenzino and Undersecretary Adri n Cosentino are the proposals from the different entities. In truth, Argentina has already received proposals all year, but now the quantity is what calls attention together with the lower cost. Another official source yesterday said that to pierce the 10% interest rate doesn't automatically mean launching debt. Nestor Kirchner had ordered that the country must finance itself at one digit. Yesterday, the Global 2017 was negotiating with a return of around 10.25%. The decision mechanism is the following: if the market continues recovering at the current speed, Amado Boudou will carry the proposal to the Casa Rosada and there they will decide on Argentina's return to the international credit market or not.

Nor is it secure that it would be the Global 2017 as the new paper to emit. In the official strategy, it's thought that the yield curve for Argentine bonds under foreign legislation has so many hollows that there are various possible alternatives, like a Global 2020, for example.

August is a difficult month for debt placement. It's when the main operators in Europe and the United States take vacations. But this year, the need to accumulate deals in banks after the European crisis makes it possible to be an opportunity, but only in the first 10 days of the month, according to what officials told Ambito Financiero. Perhaps for this reason it's that the larger chances for an emission are passing to September.

Yesterday, Nestor Kirchner from Santa Fe defended the use of reserves to pay debt. And he took advantage to recall that they are approaching US$51 billion. For that is why there is no need seen in the short term to rapidly seek the US$1 billion that they couldn't obtain at the time of the debt swap that closed in June. It is recalled that it was designated that they would only pay 9.5% at the most. All will depend, for sure, on the speed by which Argentine paper rise (if they keep to the trend). Everything entered a virtuous circle: the market is discounting the next emission, prices are rising and feeding the probability that the anxiously awaited return to the international credit markets is coming together.

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