HOY EN CAMPOS ECONÓMICOS

Today, the government would get a sharp reduction of the interest rate in the fortnightly auction of Letes, for a total amount of US$700 million. For 91-day letes, the rate could stand in 8.25% per annum. For 182-day letes the rate would be about 10%, though the market speculates that for this maturity the rate could be of only one digit.

It would be the lowest rate achieved by the Minister of Economy in the last three months. On March 13, Economy had paid 8.50% per annum to get financing with a six-month maturity. After that moment, the rate had two digits in all bids.

The two-phased bid of LETES amounts to US$350 million each of them. This is the first bid made by the Minister of Economy after the megaswap of bonds and will reflect the positive impact of the transaction on investors.

91-day Letes will register a fall around 400 basis points (4% per annum) with respect to the transaction two weeks ago. In that opportunity, the government had to pay 12.09% per annum, while now the rate would be a bit higher than 8%.

For 182-day letes, the reduction is lower given that in the last auction the rate stood in 12.44% per annum and now it would be around 10%.

Sale to retailers

The Ministry of Economy strengthen the mechanisms of sales for the retail sector. People can buy letes free of charge in the 640 branches of Banco de la Nación Argentina, brokerage houses and the Banco Hipotecario.

The only condition for paying a commission is to keep the securities until maturity. Retilers will have five working days after the bid to present their offers. That is to say, they will be able to acquire the securities until next Tuesday, with the same conditions as regard prices and interest rates than those of the 13 market-maker banks.

But there are several additional factors that are pushing rates down in this operation. Besides the fall in country risk, the presence of the CS First Boston as market maker will be felt.

Also, the resolution 369 of the National Securities Commission, that forces all funds of money to have less than 10% of their equity in Letes. There are funds that do not comply with that limit and today they will be forced to buy, generating an additional demand.