The International Monetary Fund will send another mission to Buenos Aires on Monday to continue debt strategy talks and discuss “next steps,” an IMF spokesman said on Thursday, as Argentina seeks to renegotiate its $57 billion financing package. Julie Kozack, the IMF deputy director for the Western Hemisphere, and Luis Cubeddu, head of the IMF’s mission in Argentina, will lead the team. In their previous visit just over a week ago they said Argentina’s sovereign debt was “unsustainable”.
From March 1, payments to electricity generators in the “spot” modality will be reduced to almost half and they will be in pesos, the same currency to be used for the binational hydroelectric plants rather than dollar, according to the resolution of the Secretariat of Energy published today in the Official Gazette. With this so-called ‘pesification’ step, the government expects to save $300 million per year and “regulate the tariff restructuring of the energy system with a distributive, equity, and productive sustainability criteria”, says the resolution.
The Ministry of Economy on Wednesday issued Treasury letters and bonds in local currency maturing in 2020 and 2021 worth AR $9.22 billion ($148.5 million). Of that amount, AR$2.36 billion correspond to Lebad bills maturing on August 28, and another AR$6.87 billion to a swap of the dual bond AF20 for another ones in pesos with Badlar rate plus 100 basis points. Argentina has already swapped 18% of the AF20 which was due on February 13 whose capital payout was postponed to Sept. 30.
U.S. soybean futures on Wednesday extended a rebound from a sharp drop earlier this week after the Argentine Ministry of Agriculture suspended the registration of agricultural exports until further notice. The movement was seen as foreshadowing a jump from 30% to 33% in grain export tariffs that Alberto Fernández’s government might announce this weekend, thus shifting exports to the United States.
Argentina’s Province of La Rioja plans to initiate talks with holders of its dollar denominated 2025s after it “faced limitations” on making a coupon payment due earlier this week. The government said in statement released on Wednesday that it would make best efforts to cover the payment inside the 30-day grace period, but it will start consulting holders on ways to achieve debt sustainability. The deal was the province’s debut green bond, with proceeds slated to finance the development of the Arauco Wind Farm project and other public works.
Economy Minister Martín Guzmán held in New York what he called “strategic meetings” with bank executives and investment funds that hold Argentine bonds under foreign law. Despite the total official secrecy, it was reported that representatives of BlackRock, Templeton, Pimco, Gramercy, Greylock, Fidelity, Morgan Stanley, Bank of American, Citibank and JP Morgan attended the meeting. Alberto Fernández’ government is planning to determine next week the final structure of the sovereign debt restructuring offer.
Argentina Minister of Economy Martín Guzmán, meets today in New York with representatives of banks and investment funds holding sovereign bonds regulated under foreign law. The meeting follows another held yesterday in Washington with the Deputy Director of the Western Hemisphere Department of the International Monetary Fund (IMF), Julie Kozack, and the head of the Argentine mission, the Venezuelan Luis Cubeddu, both members of the technical mission that visited Buenos Aires last week.
The renewable energy company Genneia has pocketed $31 million as the first tranche of a $465 million corporate loan granted by the German Development Bank kfW. It will be destined for the Pomona II wind power plants that are already in operation and Chubut Norte II wind farm that is under construction and is estimated to be operational in September. Genneia owns 4 projects in Argentina: Rawson III, Villalonga II, Pomona II and Chubut Norte II, with an installed capacity of 66.48 MW
Argentina Economy Minister Martín Guzmán and IMF Managing Director Kristalina Georgieva agreed to start Article IV consultations, during conversations on the sidelines of the G20 meeting in Riyadh, Saudi Arabia on Saturday. The Article IV review might pave the way to changing the terms of the IMF $56bn stand-by loan for a new program. Guzmán is travelling to Washington today to hold further meetings with IMF staff.
Argentina’s recession-hit economy shrank by 2.1% in 2019, the INDEC national statistics bureau said. The economy contracted by 0.3% in December compared to the same period in 2018. The hardest-hit sectors that month were financial services (-10%), and construction (-8%). On the other hand, the fishing industry grew by 13.5%. GDP had already dropped by 2.5% in 2018.