Moody’s reports worsening financing conditions for companies

According to a report by the US consulting firm Moody's, the COVID crisis and the fragile economic situation will increase the problems for corporate credit in most sectors in Argentina, at least until mid-2021. The document points out that the restructuring of the foreign debt could give some relief to the situation, but it clarifies: The tense fiscal accounts of the Government limit its capacity to support the business sector. The financial trap puts at risk the possible debt renegotiations of the provinces, which in many cases are already close to materializing. The companies that have been affected are Banco Hipotecario, which faces capital maturities of around $280 million on 11/30 this year, and IRSA, with $181 million by 11/15.

Energy production fell 15.1% in the second quarter

The production of energy registered a drop of 15.1% in the second quarter of 2020, compared to the same period in 2019, reported the INDEC this Thursday. In the second quarter of 2020, the synthetic energy indicator (ISE) of the seasonally adjusted series also showed a decrease of 20.9% compared to the previous quarter, and the index of the trending-cycle series registered a negative variation of 5.1% compared with last quarter.

Garbarino placed Trust and had an over demand of up to 180%

Garbarino, the leading company in the sale of electrical appliances and technology, launched this week the 158 Series of Financial Trusts, which generated strong demand, up to 180%, in what was the first debt placement after the change of shareholders of the company. Garbarino received offers for up to 2.8 times its VDF A Trust. The cut-off rate was a nominal 27.1% per annum.

Soybeans. The tax burden takes 74.19% of the gross margin of the business.

According to a recent study by the Agricultural Foundation for the Development of Argentina (FADA), the consolidated tax burden on the soybean value chain currently represents 74.19% of the gross margin of the business. Of that figure, two thirds (66%) represent export duties. After the export rights, the tax that most affects the formula is the income tax (21%).

Uncertainty among companies, which will have to renegotiate $3.3 billion

The Government informed that between October 15 and March 31 there are maturities of corporate debt for $3.3 billion. For companies with obligations over $1 million, they will only be able to buy on the dollar exchange market for 40% of the capital that matures. The rest has to refinance with new foreign debt with an average life of 2 years. The restriction points directly to the heart of companies leveraged in the capital market with negotiable obligations (ON) in dollars. It increases the risk of investing in Argentina.

Opulens, with the development of its lens design technology, has a turnover of $5 million per year

Mauro Stabile, CEO of Opulens, says that it is a company that was born in the early nineties, developing its lens design technology, which today they export as a service and with which they produce around three million pairs per month worldwide. Opulens manufactures lenses only for Argentina because they make it one by one from the medical orders that arrive from the opticians, but it sells the technology with which it produces them to the whole world. The company charges for each order around 1% of the final value of glasses, and invoices around $5 million a year.