The central bank negotiates loans with international banks to add reserves and meet the IMF target
He Central Bank of the Argentine Republic (BCRA) is negotiating short-term loans of at least US$3,000 million with international banks to strengthen reservation and finally get dollars necessary to meet the agreed target for the next review s International Monetary Fund (IMF)in a preview of what the new agreement with the organization could be.
If he could know Infobae According to sources familiar with the matter, these credits are known in the jargon as REPOs (repurchase agreement), in which Free Argentina Reconstruction Bonds (Bopreal) which is issued by the Argentine Monetary Authority.
This medium was able to confirm that the alternative with entities is advanced, but it is one of several variants managed by the Minister of Economy, Luis Caputoand BCRA President, Santiago Bausili, which the government could also combine to obtain a sufficient foreign exchange cushion. However, there will be no announcement until the deal is done.
The official assumption is a strengthening of the monetary authority’s reserves, on top of the upcoming debt payments to bondholders that Argentina faces, although securing maturity would be a positive signal for markets. In any case, there is no objective amount, so the definition will take into account “the amount/rate equation and whether the terms are reasonable”.
in detail, act It would not be carried out by the Treasury, but the borrower would be the monetary authority. This strategy has its practical side because as a guarantee -the minor– bonds issued by the accounting entity would be used.
And this can be related to properties the loan itself. AND REPO It is a short-term debt agreement in which the borrower enters on behalf of the creditors and guaranteeusually composed of debt securities. Placing government bonds at a time when country risk is hovering around 1,300 points would make the operation almost impossible. The government bonds, Global and Bonaresthey are quoted at such a discount that their value is very low and therefore of very little use as collateral.
Instead, Bopreales They are titles of a different nature. They expire during the term of office of the President Javier Milea and are issued BCRAentity that never defaulted. This means they are listed on the secondary market at a much lower discount.: while short Global has a parity of around 60%, and Boreal turns around 78 percent.
The terms circulated by a foreign bank involved in these talks show that Argentina expects to raise $3,000 million through a short-term loan, that the level of coverage the guarantee must offer must be 60% of the loan’s value. This is the amount in Bopreales, measured in market value, that the headquarters should deliver. And, of course, to increase the guarantee in the event of a drop in market value in the event of a drop in the price of the headquarters’ securities on the market.
Another key piece of information released by the bank is related to the rate the central bank will pay for this debt. Respect in middle ageso between 13% and 17% return in dollars. AND somewhat bitter aftertaste. But these are the conditions in today’s market for Argentinasources are supported.
“I find it a bit ugly that the double digit number applies, but that’s how it is.” said a source familiar with the talks. The terms are acceptable to the participating banks, this media has learned, and the deal is ready to be signed. All that remains is to make the final decision.
Spokespeople for the Ministry of Economy and BCRA did not deny the content of the report termsheet but they preferred not to comment on questions from Infobae.
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