Among local emissions in MEP dollar under Argentine lawcompanies such as John Deere, Scania, Cresud, Banco Macro and Loma Negrawhich placed debt at rates of up to 8%. In parallel, there were also placements in the international market: Banco Macro, Telecom and YPF were issued under foreign law, with rates that reached up to 8.63%.
This renewed push for corporate issues did not go unnoticed by the market or the Central Bank. In fact, it constitutes one of the factors that explain the reserve accumulation capacitysince it increases the supply of foreign currency and ensures that the BCRA’s demand does not generate additional pressures about the exchange rate.
In that context, gross bookings reached their highest level since 2021 last Fridayexceeding US$45.5 billion. So far in January alone, the monetary authority has managed to purchase more than US$900 million.
The dynamism was not limited to the private sector. Also the provinces resorted to external financing: together with companies, since the elections they placed a total of US$8.3 billion in international and local markets.
“Corporate debt placements enjoy good demand both due to the liquidity in foreign currency of the local financial system, which accumulates private deposits of around US$38,000 million, and due to the compression of yields between high yield and global American debt. For this reason, placements continue to increase the supply of foreign currency and sub-sovereigns do not want to be left out,” said F2 Soluciones Financieras in its latest Research report.
For the BCRA, this flow is relevant and was highlighted in the latest report by Vladimir Werning, where he highlighted the acceleration of corporate emissions since the elections and warned that the effective supply of foreign currency from the liquidation of these funds is still lagging behindwhich anticipates a greater entry of dollars into the exchange market.
According to data from the BCRA itself and estimates from the consulting firm 1816, there are still around US$3.6 billion of ON to be settled in the local market.
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ONs: a key measure of the BCRA
In this framework, the Central Bank introduced a key modification in the last few hours to strengthen the scheme. Access to the Single and Free Exchange Market (MULC) will be enabled for the pre-cancellation of current ONs, provided that the new debt allows the financing terms to be extended and avoids the concentration of maturities in the short term.
Upon settlement in the MULC, ONs have guaranteed access to the official dollar for the payment of capital and interest. For this reason, it is essential for the BCRA not only to sustain this mechanism, but also to ensure that the stock of financing in dollars continue to grow. In this scheme, new issues function as the source of foreign currency that allows existing maturities to be met, contributing to the consistency of the exchange regime and keep the dollar with some control.
Issuance of ONs: what it means for companies
From the financial sector, they highlight that this financing channel is clearly oriented to companies with the capacity to generate genuine income in dollars. “The dynamics of primary issues in MEP dollars appear as an efficient form of financing, especially for companies that can match currency and reduce risks. It also reflects a commitment to a more stable macroeconomic scenario, with lower exchange volatility and a greater predisposition of the market to take risk in financial dollars,” he explained. Juan AlraPortfolio Manager of ONE618, in dialogue with Scope.
According to the specialist, the companies best positioned to access this scheme are those with high credit profile and good ratingwhile the impact on reserves, although positive, must be evaluated in conjunction with other factors. “A good harvest would have a more relevant and sustainable effect on the capacity to accumulate reserves than financial flows, by providing a genuine supply of foreign currency,” he noted.
Can the emissions cycle run out?
Regarding the sustainability of the current placement boom, the focus now turns to the international context and settlement times. In that sense, Tobias PejkovichResearch analyst at Facimex Valores, warns that the pace of emissions could moderate in the short term, conditioned by external factors.
“In the short term, the dynamics of debt placements will be affected by the global context. If geopolitical tensions continue between the United States and Europe over Greenland and considering the rate increases in Japan, they will probably pause.”
However, towards the medium term, the scenario looks more favorable, supported by settlement times and new investment flows. “With a medium-term horizon, I believe that the placements of corporate and provincial debt (remembering that they have up to 180 days to liquidate offshore issues) and the boost that foreign direct investment will receive within the framework of the RIGI will help consolidate the BCRA’s dollar purchases via block trades. In a relatively conservative scenario, we estimate that the BCRA could buy between US$6-7 billion this year and, with growth in the demand for money in real terms, the potential is even greater.”
