2024-08-04 21:45:29
In late July and early August, the province of Córdoba faced the payment of principal and interest on two of the four large dollar bonds issued during Juan Schiareti’s administration.
With these cancellations, Martín Llaryora’s government has cleared the possibility of a large amount of dollar debt maturing before the end of the year.
A total of US$26.7 million is equivalent to CO26 (US$11 million) and C027D (US$15.7 million), which expire on July 27 and August 1, respectively.
To cover these two expenditures, Córdoba must allocate approximately $24.956 billion to be able to purchase the necessary dollars.
Most of these funds, as well as the U.S. dollar funding required due last June ($159.06 million), were obtained through the issuance of peso securities in May (COY27) with a total value of $120 billion, adjusted for inflation over 36 months.
Strategy
Although former governor Juan Schiareti and Lagliola himself agreed during the 2023 campaign to ensure that Córdoba’s debt was not a major issue in Panal’s financial framework, the fact remains that since the liabilities are almost entirely in foreign currencies designation (98%), so debt in Córdoba is very expensive.
Worse, revenue has fallen for 10 consecutive months in real terms, which is beginning to unravel the government’s main argument: that the debt is manageable in terms of collections.
During Llaryora’s four years at Panal, he will have to contend with $1.472 billion in debt, between amortization and interest on the capital of the four titles in dollar terms alone.
According to the payment schedule, the payment peak will be reached next year, when US$481 million will need to be paid (including US$398 million in capital and US$83 million in interest).
These bonds account for 80% of total debt. In addition, U.S. dollars, euros and Kuwaiti dinars have been pledged to be paid to multilateral organizations and international banks.
For the remainder of 2024, no major spending is committed until December, except for a small payment of $11 million in October for another quarterly CO26 maturity. During that month, the semi-annual commitments of two other major games had to be addressed: CO24D and, ultimately, CO21D.
Among them, about US$160 million matures from December 1 to 10. In addition, by that date, the province will also have to pay for the first rental service fee for the new COY27.
As of December 2023, total debt is $2.157 billion, equivalent to 4.3 months of recoveries.
Dollar debt reduced spending during those seven months, but revenue dropped significantly, so the relationship is sure to grow. The peak in recent years was in 2005, when it took 13.2 months of income to pay off the stock.
While the debt strategy at the start of this administration was to issue new bonds or rematurity securities in current dollars, problems with access to financing forced us to go another route: changing the denomination of the bonds bit by bit. to pesos.
The $120 billion provided by COY27 is the first step. Llaryora expects to issue a total of $350 billion in securities (including $120 billion tendered) and $150 billion in notes.
COY27 interest is paid semi-annually (the first installment is paid at the end of November), and the capital will be amortized in two installments. The first installment will be amortized by 25% on the 30th month, and the remaining 75% will be amortized on maturity.
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