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While he prepares the emission of a new bond, Boudou took US$47 million from the Lottery
El Cronista
August 18, 2010

By Esteban Rafele and Juan Cerruti

The Economy Ministry put out a Treasury letter for US$47 million to the National Lottery, while it continues to monitor the foreign market with an eye toward emissing a Global 2017 bond that has been on the table for months. It's that the yield demanded by investors on that bond 9.89% annually in dollars, according to yesterday's figures is not convincing the Palacio de Hacienda, which is now pointed toward an interest rate below 9%.

The placement at the Lottery dated the 9th of August but published yesterday in the Official Bulletin has a term of six months and pays a modest interest of 1.3% annually. And it is added to the emissions subscribed to by ANSeS and other public dependencies throughout the year. Meanwhile, the Palacio de Hacienda is continuing to delay its going out to the voluntary debt markets. Official sources repeat that in the office run by Amado Boudou, there is no hurry to hold the international placement, while Finance Secretary Hern n Lorenzino and Undersecretary Adri n Cosentino have the paperwork ready to emit bonds at a moment's notice. The betting is to be able to do it for a yield close to 8.75%, the nominal coupon of the Global 2017 bond.

Economy officials repeat in unison that they will not approve just any interest rate for placing bonds at US$1 billion, which is already intended to fix a benchmark interest rate for the private sector. But they also know that a 7-year emission or longer will improve the yield curve for Argentina, which will face debt maturities in 2011 of US$17 billion.

Despite this, Economy argues that it can cover those obligations even without going out to the market, if conditions for emitting new debt or refinancing short bonds the Boden 2012 is the heaviest are not convenient. According to official calculations, 65% of the commitments are with public dependencies or multilateral organizations, which can be renegotiated without difficulty.

The remaining 35% - some US$6 billion could be dealt with from various public coffers, like the aforementioned ANSeS, Loteria or Banco Nacion. The officials want to stress that argument in a year in which, they know, that they will have to face a certain aversion to risk attached to the elections. For now, the possibility of appealing again to a new fund made up of Central Bank reserves is only a hypothesis.

On the other hand, they hope with skepticism for an eventual increase in the ratings from Moody's agency, which might improve its forecast on Argentine debt soon.

This week they will complete the payout of bonds corresponding to the last debt swap, which meant the restructuring of 92.4% of the payments interrupted at the end of 2001. On that, attorneys for the country are putting together various alternatives to present to New York Judge Thomas Griesa to try to close the cases initiated by the vulture funds in the U.S.

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