UNCTAD’s Seventh Debt Management Conference
9-11 November 2009
Argentina : A country with limited access to
financing in the capital markets
by
Mr. Norberto Lopez Isnardi
Director Nacional
Ministry of Economy and Public Finance
The views expressed are those of the author and do not necessarily reflect the views of UNCTAD
Ministry of Economy and Public
Finances
Under secretariat of Financing
REPUBLIC OF ARGENTINA
A country with limited access to
financing in the capital markets
November 2009
2
On December 24, 2001, the Government
suspended payments on a substantial
portion of Argentina’s public debt prior to
12-31-01 except Multilateral Debt and
National guaranteed loans.
3
Gross Public Debt as of December 31, 2001
Performing debt
Multilateral debt
National Guaranteed Loans
Non-performing debt
Bonds
- Peso-denominated bonds
- Foreign currency-denominated bonds
National Guaranteed Loans
Treasury notes
Bilateral debt
Private banks (commercial banks)
Other debt
Total gross public debt
In millions of
U.S. dollars
As a % of total
public debt
52.673
36,5%
32.362
20.311
22,4%
14,1%
91.779
63,5%
55.057
1.505
53.552
21.947
6.746
4.477
2.015
1.537
38,1%
1,0%
37,1%
15,2%
4,7%
3,1%
1,4%
1,1%
144.453
100,0%
4
Sources of funds of the National Government
2002-2004 (in millions of U.S. dollars)
6.000
5.000
4.000
Total financing 2002: U.S. 18.823 million
2002
Total financing 2003: U.S. 5.763 million
2003
Total financing 2004: U.S. 11.739 million
2004
3.000
2.000
1.000
0
IMF
World Bank
IADB
Primary fiscal
balance
Central Bank
Intra-Public
Sector Issuances
5
2005 Debt Exchange
The aggregate value of securities that were eligible to participate in the exchange
(including nominal value of the eligible securities and accrued past due interest
accumulated as of December 31, 2001) was approximately U.S.$81.8 billion. This
amount was U.S.$. 102.6 billion with interest arrears.
Tender debt amounted to U.S. 62.2 billion, 76.15% of total eligible debt
In exchange for all tendered amounts, Argentina issued approximately an
aggregate principal amount of:
• U.S.15.0 billion in Par Bonds,
• U.S.11.9 billion in Discount Bonds; and
• Ps.24.3 billion in Quasi-Par Bonds (approximately U.S.8.3 billion).
• GDP-linked securities in a notional amount of approximately U.S.62.3 billion.
Issuances of bonds in U.S, Euros, Yenes and Arg. $
This debt exchange implied a reduction in public debt stock of U.S.$. 67.3 billion.
6
2005 Debt Exchange
USD Million
Eligible Bonds
81.836
Tender Debt
62.318
Acceptance of tenders
76,15%
Old Debt
New Debt
Par Bonds
15.000
15.000
Discount Bonds
35.405
11.932
Cuasi Par Bonds
11.913
8.329
Total
62.318
35.261
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Gross Public Debt as of June 30, 2005 (1)
Performing debt
Multilateral debt
BONDS
National Guaranteed Loans
BOGAR
Temporary Advances
Others
Non-performing debt
Bilateral debt
Principal and Interest arrears
Total gross public debt
In millions of
U.S. dollars
As a % of total
public debt
119.130
94,2%
27.400
60.458
15.083
10.995
4.949
245
21,7%
47,8%
11,9%
8,7%
3,9%
0,2%
7.336
5,8%
2.911
4.426
2,3%
3,5%
126.466
100,0%
(1) Excludes bonds that do not participate in the 2005’ exchange of debt
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Sources of funds of the National
Government 2005-2007 (before 2008
International crisis)
Primary Surplus of Public Sector
Multilateral Organizations Loans
Market Placements :
• Restart dialogue with market participants, contact with investors
(local and international).
• Bonds Issuances:
o Domestic market auctions in tranches
o Private placements
• Design of instruments that contemplate investors needs and
the objectives of the National Government:
o U.S denominated bonds
o Medium and long term debt
• Greater participation of International Investors:
• Local Institutional Investors
• Coordination with Central Bank
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Sources of funds of the National Government
2005-2007 (in millions of U.S. dollars)
(before the crisis)
9.000
8.000
7.000
Total financing 2005: U.S. 14.753
millionfinancing 2006: U.S. 16.969
Total
millionfinancing 2007: U.S. 19.757
Total
million
6.000
2005
5.000
2006
2007
4.000
3.000
2.000
1.000
0
IMF
World Bank
IADB
Primary
fiscal
balance
Central
Bank
Treasury Intra-Public Domestic
Private
10
notes
Sector
Capital Placements
Issuances Markets
Sources of funds of the National Government
2008-2009 (in millions of U.S. dollars)
(during the crisis)
10.000
Total financing 2008: U.S. 21.477 million
Total financing June 30, 2009: U.S. 6.587 million
8.000
2008
As of June 30, 2009
6.000
4.000
2.000
0
World Bank
Otros
Primary fiscal
Organismos
balance
Internacionales
Central Bank Treasury notes
Intra-Public
Domestic
Sector
Capital Markets
Issuances
Private
Placements
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2010 Financing Strategy
Primary Surplus of Public Sector
Liability management
Multilateral Organizations Loans (IADB, WB and CAF)
Argentina will proceed to restructure its Untendered Debt
Market Placements
Intra-Public Sector financing
Financing in the Capital Markets
Argentina will continue with the normalization of its relations
with the international comunity
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Macroeconomic Indicators
Growth of GDP
15%
Primary Surplus (% of GDP)
5%
4%
10%
3%
5%
2%
0%
-5%
2002
2003
2004
2005
2006
2007
1%
2008
0%
-1%
-10%
2002
2003
2004
2005
2006
2007
2008
-2%
-15%
Current Account (% of GDP)
50
9%
International Reserves (billions of dollars)
40
7%
30
5%
20
3%
10
1%
2002
2003
2004
2005
2006
2007
2008
2002
2003
2004
2005
2006
2007
2008
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Public Debt Burden Indicators
Public Debt (% of GDP)
180%
150%
120%
90%
60%
30%
0%
2002
2003
2004
2005
2007
2008
Composition of Public Debt
100%
80%
60%
2006
79,1%
75,8%
51,4%
52,1%
52,8%
52,5%
48,6%
47,9%
47,2%
47,5%
2005
2006
2007
2008
75,6%
40%
20%
20,9%
24,2%
24,4%
2002
2003
2004
0%
Debt in local currency
Debt in foreign currency
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Emerging Markets Bond Index (EMBI)
2000
1800
EMBI ARGENTINA
1600
EMBI BRASIL
1400
EMBI LATINOAMERICA
1200
1000
800
600
400
200
09
/0
9/
18
20
/0
6/
09
09
/0
3/
22
22
/1
2/
08
08
/0
9/
23
25
/0
6/
08
08
/0
3/
27
28
/1
2/
07
07
29
/0
9/
07
/0
7/
01
/0
4/
02
02
/0
1/
07
07
0
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Thank You!
http://www.mecon.gov.ar/finanzas/sfinan/
oncp1@mecon.gov.ar
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