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Omnibus Law maintains liquidation of ANSES securities and flexibility to restructure debt

Although Javier Milei assures that he does not negotiate, in recent days the Government was forced to resign aspects that it considered untouchable in the bill. omnibus law. This is the case of the fiscal package and even, according to the latest draft that was circulated to the legislative blocks, of some of the powers that Congress intended to delegate to it, such as that of legislating on pension matters. However, there are a series of economic reforms that he clings to, such as the flexibility of the external debt policy and restructuring of liabilitiesBesides the liquidation of public securities in the hands of state agencieswhich will be mainly affected by Anses Sustainability Guarantee Fund (FGS).

At the closing of this note, deputies from different blocks confirmed that the articles that deal with These points still stood.. And this was reflected in the draft that the Executive sent to the legislators on Sunday night. This draft included new modifications, such as the reduction of delegated powers and the elimination of the prerogative to transfer the FGS to the Treasury, among others, which were added to the suppression of the fiscal package (withholdings, mobility formula, money laundering, moratorium and Personal Assets). But the discussions to obtain the votes of the “dialogue” or “soft” opposition continue and The session in the Lower House was postponed to Wednesday at 10.

In the last few hours, one of the points that attracted the greatest rejection by the blocks that oppose the omnibus bill in general was (along with the delegation of powers and the privatization of public companies) that of the reforms regarding indebtedness.

Article No. 77 of the majority opinion that the ruling party obtained last week in the latest draft remains as No. 73 and provides: “Article 1 of the Law Strengthening the sustainability of public debt is repealed No. 27,612”. This is the law that Parliament approved in 2021 at the initiative of the then Minister of Economy, Martín Guzmán. Precisely in its article 1, it establishes that “any issuance of public securities in foreign currency and under foreign legislation and jurisdiction” that exceeds the maximum percentage authorized in the annual Budget “will require a special law of the Honorable Congress of the Nation that expressly authorizes it.” ”. In other words, the omnibus law opens the door for the executive branch to borrow abroad above what was budgeted without asking for legislative approval.

The need for parliamentary authorization was a response from the previous government to the cycle of external debt that marked Mauricio Macri’s management. Between 2015 and 2019, the debt in foreign currency increased by around US$100,000 million: first, through the placements of the then Minister of Finance and now Minister of Economy, Luis Caputo, in the international market and, then , through the agreement with the International Monetary Fund (IMF).

Not only Unión por la Patria and the Left Front oppose this point of the omnibus law. Also a sector of the UCR. “We are not going to support Caputo being able to take on debt without going through congress,” radical deputy Mario Barletta said this Monday in statements to Radio El Destape. It remains to be seen if the Government comes up with the numbers to approve it.

Debt, omnibus law and restructuring

Another article in question is No. 14 of the opinion (it remains with No. 13 in the latest version), which makes the requirements for any public debt restructuring process more flexible defined by article 65 of Law No. 24,156 on Financial Administration.

This law establishes that all restructuring must imply “an improvement in the amounts, terms and/or interests of the original operations” and, in general, it was interpreted as requiring two of those three conditions: capital reduction, extension of the maturities and reduction of rates.

Specifically, the latest draft of the omnibus bill directly erases all reference to these three dimensions and simply provides that the restructuring must be carried out “taking into account the prevailing conditions of the financial market.”

The Financial Administration Law It dates back to 1992, but the current wording of Article 65 has been in force since 2007, when Congress decided to set certain limits for public debt conversion negotiations. It was the result of the experience of the 2001 “mega-swap” negotiated by Sunday Cavallo and Federico Sturzenegger, which consisted of a three-year postponement of maturities in exchange for an increase in capital and interest rates payable.

“If this (the omnibus bill) was written by Sturzenegger, the same author of the mega-swap, is this an amnesty for Sturzenegger?” the UP deputy asked weeks ago. Itai Hagman during the committee debate on the initiative.

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The FGS and the consolidation of intra-State debt

There is another point of the project on debt policy that has as its main focus the ANSES FGS. Although in the latest version of the project the transfer to the Treasury of the shares of companies held by the fund was eliminated in response to the claim of certain opposition blocs, “consolidation” of public debt continues held by State agencies (with the exception of the Central Bank and the National Bank). This means that These titles would pass into the hands of the Treasury to be delisted, that is, deregistered..

Once the BCRA is over, the FGS is the main party involved: according to a report by the Institute for the Study of State and Participation (IDEP) of ATE Nacional, prepared by Horacio Fernández, Claudio Lozano and Alejandro López Mieres, it owns 24% of the currency titles local ($12 billion), only behind the Central; and with US$12 billion, it is the largest local holder of securities in foreign currencies.

“The consolidation of the Public debt is maintained, which will cause 75% of the FGS holding to be deregistered by reducing the public debt by US$35,000 million,” said Bull Market, the securities company of Ramiro Marra’s family when analyzing the latest version of the project. And he added that the elimination of the transfer of shares held by ANSES has an impact on “any strategy for placing debt against guarantees,” a possibility that had been analyzed by the economic team to obtain dollars in the international market.

Considering that intra-State liabilities represent around half of the public debt stock, it can be considered that consolidation would serve the Government to reduce the maturity profile in view of its aim of re-access financing abroad.

However the IDEP suggests that this point is also part of a strategy for the “reprivatization of the pension system.” The report highlights that, once transferred to the Treasury, the titles “will be canceled due to patrimonial confusion,” which implies that “the State’s obligation” to public entities will disappear: “Beyond the relevance or not of netting debt between organizations and/distributions of the SPN (National Public Sector) This cannot be applied to public debt securities in the hands of the Pension System through the FGS since it is a Specific Affectation Fund and is not reached due to any patrimonial confusion.”

The project provides a mechanism so that within a period of 90 days the organizations can express to the National Budget Office the need to maintain a credit equivalent to the debt in question, although the decision on granting it would remain in the hands of the Chief of Staff. .


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