The economic team Toto Caputo works on a loan with banks private, known in the jargon as a REPO (Repurchasement agreement). A measure that will function as a bridge to next year and that the markets They already bought, but the Government is waiting for the elections in USA to finish closing it.
Letter P was able to confirm from official sources that the operation will be carried out by the Banco Centralwhich is already negotiating with two and three banks to finalize it and which is in an “advanced” state, with the possibility of closing in October.
A REPO is characterized by being a repurchase agreement: one party sells an asset to another with the obligation to buy it back within a period of time and with specific conditions.
To carry out the transaction, Argentina must provide an asset as collateral, which could be gold or debt securities. “Both things are on the table,” said a government voice.
The mix of Toto Caputo
In Caputo’s environment they assure that this type of exchange guarantees lower rates than those that the international market can offer, since Argentina currently has a country risk index of 1,236 basis points, which presumes still very high interests and low confidence. in the financial sector.
In the City of Buenos Aires the run of an operation of this type gained strength in recent weeks. Market agents assured this medium that the amount would be between US$3,000 million and US$4,000 million.
Toto Caputo Santiago Bausili
Santiago Bausili and Toto Caputo
THAT
Both Caputo and the head of the Central Bank, Santiago Bausiliand his team are finishing defining a mix between bonds and gold in order to enable the libertarian administration to achieve a rate “below 10%” but that at the same time does not interfere with the negotiations with the International Monetary Fund (FMI).
More gold, less IMF
The use of the gold that the Central sent abroad, as confirmed without specifying its destination at the beginning of September, impacts the liquid reserves that the international organization closely monitors to determine whether or not Argentina meets the goals agreed in the current program and future agreements. But at the same time, the more bullion that is used as support for the REPO, the less interest the repurchase agreement will have.
“The most sensible thing is that they balance the assets that they give as collateral to maintain relations with the Fund and that the rate percentage is as low as possible,” indicated a trader influential in the City. In the Buenos Aires square, five financial entities are being considered with which he would be speaking.
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Toto Caputo, Santiago Bausili and the gold reserves
The market risks that it will be a loan with a term of 18 months, while a source familiar with the negotiations stated that the duration is not fixed and that the loan obtained will not be used for a specific purpose, but rather to increase the coffers of the monetary authority to increase liquidity and give signs of confidence.
However, those close to Caputo point out that the official intention is to cover the maturities with private bondholders that the libertarian administration will have to face in January 2025 for US$4.9 billion.
In the private sector there is talk of five financial entities with which the libertarian administration is talking. The North Americans Morgan Stanley, Goldman Sachs y Citibank; the japanese Nomura; and the Spanish capital bank Santanderthe only one confirmed by Bloomberg.
Sideways glance at the United States
The market “bought” the possibility that the REPO would be confirmed in the short term, they indicate in the Buenos Aires market, in the midst of a context of scarce reserves, obligations to fulfill and an economic program that does not generate the necessary foreign exchange.
“It is visible in the prices of the bonds,” which in the last month were at their highest, exemplified the member of an important stock exchange company.
The turning point, they speculate, will be the elections in the United States on November 5.
“If you win Donald Trumpthe Government has room to announce the REPO with the story of support from the US,” the sources consulted explained to this medium.
Other City operators are hesitant. “The loan is a half-measure or rather a preventive measure. They are trying to make a bridge until the Fund makes the money available or not,” said a representative of a fund with clients abroad.
In 2017, Caputo was the architect of a REPO operation for US$6,000 million, at a rate of US$1,000 million with each of the six banks that participated, with a return period of 18 months and an annual rate. of 3.8% annually.
