Debt in Pesos: Market Fears a New 'Wall' of Maturities Every Three Months

The market is becoming complicated for the Minister of Economy, Luis Caputo. Alongside the rise in interest rates in the United States and an early electoral concern, interest rates have increased, complicating what was once a straightforward issue, such as the rollover of debt. In the case of pesos, the market is starting to fear that the 'wall' of maturities will reappear in the coming months due to the Treasury's inability to make placements with a horizon that does not exceed next year's elections.{#p-1791497399071-35130}

According to data from Cohen Financial Allies, between March 27 of this year and August 12 of the past year, all debt auctions in pesos carried out by the Ministry of Economy managed to postpone approximately 40% of the maturities until after October 10.{#p-1791497399071-51120}

However, since the second call in August and the two placements in September, 100% of the renewals have been made with maturities within Javier Milei's government period. This is known as "electoral risk". In fact, all those calls stopped including the Bonar 29 (AO29), which still has about $800 million to place this year and about $5 billion in 2027.{#p-1791497511797-82809}

A similar situation occurred during the second half of Alberto Fernández's government, when the market, distrustful, would not grant credit beyond three months.{#p-1791497511797-25335}

Sergio González, head of the Investment Office at Cohen, noted in a local view with investors: "We were coming from a period where several maturities were being managed. That has stopped. With the level of rates we have today, it is very complicated for the Government to validate those levels to set long-term maturities," González explained.{#p-1791497511797-4784}

In this sense, the analyst indicated that there is now a risk that if the Economy continues renewing 100% in short terms in the coming weeks, "those maturities will pile up with those already existing, for three months from now." "That is a potential risk we are monitoring," the economist noted.{#p-1791497511797-71628}

There Are Also Problems with Dollars

Similarly, González warned that the Government will have problems closing the financial program in dollars for 2027, something that generated quite a stir on social media because it was also pointed out this week by EcoGo's director, Marina Dal Poggetto.{#p-1791497511797-17908}

Although Dal Poggetto indicated that the gap the Government would have to cover would be about $23 billion, at Cohen the estimates are more modest. They believe that it would lack about $5 billion.{#p-1791497511797-80988}

González indicated that, in fact, for Argentina the international voluntary market "is closed", estimating that a viable floor for Luis Caputo to issue should be 450 basis points of country risk.{#p-1791497511797-35509}

The analyst then indicated that investors will be asking "where Argentina can get dollars to meet its obligations". In this aspect, he considered that the only chance will be in "the generation of reserves".{#p-1791497511797-67901}

"The purchase of reserves is seen as a driver for what may come in the last part of the year and the first six months of next year," González noted.{#p-1791497511797-4811}

The Maturities of October

As Ámbito has already pointed out, the Government will have a very demanding mass of maturities to renew in October, reaching almost $27 trillion. This is mainly due to the fact that in the operation of exchanging dollar-linked letters that matured on September 30, most were postponed by a month.{#p-1791497399071-72429}

According to Dhalmore's estimates, the maturities will first be divided into about $4.86 trillion by October 15, and another $22.13 trillion by the end of the month. The first of the commitments corresponds entirely to fixed-rate bonds. It is assumed that the Ministry of Economy will not have problems renewing them. The second consists of $6.3 trillion in CER, $8.15 trillion in dollar-linked, and $7.68 trillion in Boncap and Lecap.

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