Analysts doubt that there is a plan to deal with debt - Analysts doubt legitimacy plan debt dealing!

Governor Axel Kicillof asked yesterday to postpone the expiration of US $ 250 million that is dated next 26 of this month to May 1. The opinions generated by this decision are so dissimilar among economists that they left two conclusions: the poor communication when making the announcement (through a requested one) and the uncertainty that it adds to the future. Why was the payment postponed for the month of May? Why only the payment of the bond capital is postponed and not the US $ 27 million interest paid? Why four days before the announcement, in the Presidency they said they were going to help the province to avoid the default and two days later, the Minister of Economy, Martin Guzman, indicated that he did not contemplate any rescue?

Beyond these questions, which benefit financial speculators with changes in bond prices, analysts consulted said that "the decision of the governor of Buenos Aires was" expected, but criticized "improvisation" around the debt .

Specifically, for now the creditors were asked to postpone the payment of the Buenos Aires 2021 dollarized bond (BP21) to May. If 75% of the bondholders accept, the payment is postponed. Otherwise, the province can cancel that amount or go into default.

Analysts doubt legitimacy plan debt dealing

"This occurs in the most important province of Argentina, with a governor who is akin to the Government. The bonds are held by institutional creditors, who can get scared and get rid of those titles quickly. And those who buy the bonds are the funds that they are engaged in litigation, which could generate a serious problem in the future, "said Héctor Torres, former IMF executive director representing Argentina. In addition, he criticized the decision not to accept the remaining US $ 13,000 million disbursed from the agreement with the Fund, especially after the Government has implemented ambitious fiscal measures with the emergency law.

Regarding whether it was a coordinated strategy with the Nation, there are analysts who discount that it was an isolated decision, after the statements made by the Executive in recent days.

"When Guzmán speaks about this issue and bring down the prices of the bonds, it allows the province to have more concessions with a greater removal, which is a very risky strategy that demonstrates conceptual and professional weakness," a former official of the Central bank.

For his part, former Secretary of Finance Daniel Marx, who had advisory talks with the economic team of Guzmán, said that the province and the Nation "have separate roads, but not divergent." "Each one has its own legal entity, but some signal effect has, although not binding. The amount to be postponed is not so large, but when there is no box it is difficult, especially with the priorities they have," he said. the director of Quantum Finance. He added: "It is a measure that is not surprising, since the country does not have access to the voluntary market, although it was discounted that the payments would continue a little more."

Likewise, Miguel Kiguel, director of Econview and former secretary of Finance, agrees: "I don't think Kicillof's decision has much effect on the renegotiation of the Nation. What I don't understand is why it was postponed until May, since I don't think they will go to have substantial changes: you will not be better able to pay what you are today. "

The change that could be is that the Guzman team ends the debt renegotiation and Argentina re-accesses the foreign market. The president said the deadline for this is March 31, but negotiations depend on many factors, which could delay the talks.

The creditors also look sideways at the Government's talks with the IMF. As indicated in the Presidency, the negotiation "is on track", although in the IMF they say there is no planned date for a visit to the country.

"The situation seems more complicated than it arises. Guzmán has bigger problems than the possible default of the province. In the Government they indicate that the renegotiations will end before March 31, but without a previous agreement with the Fund this seems little credible, since the IMF is the main creditor. And it is very difficult to negotiate with the agency and the private sector before this date, "concluded a Wall Street fund executive.