After 30 years, Banco Nación seeks to reissue debt and return to international markets. The plan that its president, Daniel Tillard, is working on, aims to fund itself to accompany the strong expansion of creditin the middle of the delay in the process to privatize the largest financial entity in the country and the Government’s threats to close new branches in municipalities that increase municipal taxes.
The intention of the state bank is first test the local market with the placement of debt in pesos and dollars, and then the foreign market. Although the entity did not report deadlines, the initiative arises in a context where the available money laundering continues to encourage demand for securities issued by companies, with rates between 5 and 7%much less than what was required to go outside.
The decision to go into debt, which was anticipated by Bloomberg, would allow it to finance itself more cheaply. The entity is leading the expansion of credit, at the cost of lower liquidity in pesos and leveraged by the surplus of dollars from laundering. According to the Central Bank, loans to the private sector in dollars rose 7.7% in September. “We are seeing that in Argentina credit is going to multiply in pesos and dollars“, they confirmed from the Nation.
According to its balance sheets, the last time the entity placed debt in dollars abroad was in 1993 to fund loans with longer terms and lower rates. Now, the plan to get into debt It would be a sign of the Government’s serious intentions to return to the marketsalthough the decrease in country risk below 1,200 points is still an insufficient level for Argentina to be able to take on debt at reasonable levels.
The private funding of Banco Nación It would also serve to help the Central Bank, by absorbing part of private demand and reducing competition for dollars. which makes it difficult for the monetary authority to purchase reserves. “Banco Nación would take on debt that it would then channel into credits, preventing the importer from suing the exchange market today, it is not the solution, but it gives them time,” said a source close to the entity.
However, the entity’s return to the markets would have its risks. Strictly speaking, within the financial sector Only Banco Galicia issued debt in dollars this year and it was for the purchase of HSBC. Previously, Banco Macro and Galicia placed in dollars in 2016, while Banco Hipotecario had an exchange in 2020. Within this frameworkit is likely that the market will demand a high rate from the public bank due to its history of low profitability.
On the other hand, if the debt in dollars is to finance credits in pesos, there is a risk that a devaluation will increase liabilities above assets. “Banks have almost all their assets in pesos, consequently, the risks of currency mismatch are relevant. It is also valid for Galicia, who placed debt a few weeks ago and it was well received, but it is still a point to take into account,” they said in a bank.
With 17,700 employees and more than 650 branches, Banco Nación was at the center of the storm since On Tuesday, the President ordered the Minister of Economy, Luis Caputo, to close the branches of the municipalities that apply increases in municipal rates “unjustified.” The threat forced La Pampa to back down, after the closure of 9 branches and a zonal management in the province, which would now be reversed.
After the failure of privatization through DNU 70 and the Base Law, the Government was still unable to transform the bank into a public limited company. The idea is to sell shares to private companies, such as Banco de Córdoba (Bancor) and Banco do Brasil. The entity has already reduced 500 positions, but the restructuring was put on holdpossibly waiting for the next elections, after an adverse ruling by the Federal Justice of La Plata.