With a new rate reduction, Letes bid in dollars

With a complicated international scenario, the Ministry of Finance will reissue Letes in six-month dollars at a minimum rate of 5.5%, continuing with the decreasing tendency of these securities in the last tenders.

This level of rate implies an improvement of one percentage point and a half respect to the 7% in dollars that the Treasury had to pay on September 12 to obtain US $ 760 million, in the worst crisis of confidence regarding the Argentine payment capacity.

Since then, the Treasury made two other placements at lower rates: September 26 to 6.5% and October 10 to 6%. Thus, if the 5.5% sought now were realized, this decreasing trend would follow and the lowest coupon would be paid from August.

“The final bid rate should be between 5.5% and 6%, according to what is being negotiated in the secondary market,” said the director of MB Inversiones, Diego Martínez Burzaco.

However, the tender could be complicated by external factors. On the one hand, there is a sharp fall on Wall Street after a longer “bull market” (bull) cycle in history, in which many analysts had been seeing a bubble for a while. On the other hand, on the European side there are pressures on the euro due to the budget dispute in Italy and the pound for the lack of progress with the Brexit.

In fact, the wholesale dollar registered this scenario and started on Tuesday with a rise of more than 30 cents. However, Martínez Burzaco considered that “the 5.5% offered at six months, despite being lower than the recent 7%, continues to be a good rate, considering that in the US. a 10-year bond yields 3.20%. “

“Obviously, this level of rate shows the magnitude of the Argentine risk, but with the agreement with the IMF that would be approved this Friday there would be almost no possibility of default,” he added.

Who will invest
On who will bet on the Letes, Martinez Burzaco said that “they can go who are beating these instruments today and seek to do ‘rollover’ (renewal), others who see the dollar low (although today rose) and see fit to subscribe Letes in pesos to a wholesale exchange rate, and others that, even with high rates in pesos, disarmed some investment today and have to place their funds. “

The titles that will be tendered this Tuesday and Wednesday will be 182 days (due April 26) and will have a maximum price of US $ 973.31 for every US $ 1,000 face value (that is, a minimum rate of 5, 5%).

The subscription may be made both in pesos and in dollars (at the exchange rate on Tuesday) and the maturity of the Treasury this week is around US $ 900 million.