So far this year, amid the crisis caused by the pandemic, the government has managed to obtain financing of more than $4.7 billion from the IDB, CAF and the World Bank, among other organizations, with the clear objective of boosting the economy. Already, $800 million disbursed. The IDB will provide $1.8 billion, of which $300 million will go to reactivate SMEs.
In the first five months of the year, the industry sector executed 93.8% of the budget—71.1 billion pesos ($ 1,008 bn), which represents 2.9% of the total. The figure corresponds to the financing of production.
On Wednesday, the rating agency S&P lowered the rating of seven Argentine bonds denominated in dollars to “D” from “CC” because the country did not pay the maturity of $582 million in interest.
Bilateral trade with Brazil reached $1.1 billion during June, according to official data from the Brazilian government. It means a year-on-year contraction of 35%, the lowest level since 2003. The bilateral trade balance showed a deficit of $103 million for Argentina.
Although the national government estimates that in total it injected 5 points of the product into different direct and indirect programs to confront the pandemic, the amount spent up to May reaches 2% of the GDP. If we add to this the spending of June, the amount rises to 2.9%.
Two major car paint manufacturers announced in the last hours that they would stop producing in the country as a result of the crisis caused by the pandemic both locally and globally. They are the German company Basf and the American company Axalta. The German company will move production to the state of Sao Paulo but will continue to operate commercially in the country through imports. On the other hand, the American company announced that it is withdrawing from the local market definitively.
The departure of Latam from Argentina means that it stops flying to 12 domestic destinations, three regional ones (Sao Paulo, Santiago de Chile and Lima) and one international one (Miami). Yesterday, the date was set to begin negotiations on the future of the 1,715 employees who will be fired when Latam Airlines completes its exit from Argentina.
The stock of debt indexed to the dollar already amounts to u$s557 million so far this year, of which $472 million were closed in the last 40 days. This reflects the interest of issuers and investors. At the moment, there is idle liquidity and particularly voracious appetite of investors, but the problem is that when it devalues, that indexed debt is not going to be worth what it is now. It starts to be worthless because the exchange rate adjustment is over, the price goes up because of the devaluation and the next day the holders go out and sell it. This ends up complicating the BCRA, which today would already have sold positions for more than $4 billion.
Arcor will go out today to the capital market to seek funding through the issuance of negotiable bonds indexed to the official dollar, for which it expects to get at least 500 million pesos ($7.09 mn). They will earn interest equivalent to the Badlar rate for private banks, currently at 29.63% per year, plus a cut margin to be established on the day of the auction and will have a term of 15 months.
The stock of total gross external debt with debt securities at nominal residual value as of March 31, 2020, was estimated at $274.247 billion, according to the INDEC. It is a decrease of $4.24 billion from the previous quarter. 94% of the external debt at nominal value is in foreign currency, 59% is in dollars. The current account registered a deficit of $444 million.