Minister Martín Guzmán Will Meet With IMF Representatives And Donald Trump

Washington (correspondent) .- Economy Minister Martín Guzmán will land in New York with an intense agenda that begins Monday with a meeting with investors and continues Tuesday with meetings with the man of the International Monetary Fund for Argentina and a Treasury official from the United States. Meanwhile, on Wall Street they still do not see a clear course for the path that the Government will adopt for debt and ask the minister for definitions.

Guzmán arrives in Manhattan invited by Susan Seagal, the head of the Council of the Americas, where the minister will have a closed breakfast with bondholders and businessmen with interests in Argentina at the headquarters of the agency, in the flirty Upper East Side of Manhattan.

The minister will meet on Tuesday with Luis Cubeddu, the head of the mission of the Fund for Argentina, who will move to New York to see Guzman and begin to sharpen in person the plans for restructuring the loan of 57,000 million dollars that the agency agreed with the government of Mauricio Macri, of which 44,000 million have already been delivered.It is not the first time that Guzmán and Cubeddu, who assumed in replacement of Roberto Cardarelli, the faces are seen, but it will be his first meeting with the acting minister. Both had met secretly in Washington in November, before the assumption of President Alberto Fernández and when he had not yet transcended the appointment of the Silver economist as minister. At that meeting, at the headquarters of the Fund, Guzman had also appeared before the agency's executive director, Kristalina Georgieva.

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The minister will also take advantage of his time in New York to meet with a US Treasury official, who will travel to Manhattan to soak up government plans to pay off the debt.

The support of the government of Donald Trump in the executive board of the Fund is fundamental, since the United States, given the size of its economy, has a key voting power. In fact, Macri enjoyed a crucial support from the Treasury in obtaining the largest loan in the history of the agency.

The Government has already said that it does not want more money from the Fund and that it will seek to postpone the maturities because first it wants the country's economy to grow and then be able to pay. It also has to re-roll the debt with the bondholders, although it is not yet clear what the plan, the offer or the sequence is. The Fund has already said that Fernández's first measures were “positive” to stabilize the economy, but they still do not see a general program on which to negotiate.

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Investors also look for signs from the government about how debt management will be. "Wall Street expects definitions because today, after more than a month of the new government, there is still no road map," Jorge Piedrahita of Gear Capital Partners told Clarín. “There is no economic plan, it is not clear what the debt restructuring strategy is, nor the negotiation with the IMF. There are many questions and few answers. I see a certain degree of improvisation, ”he added.

The expert notes growing pessimism among investors: “On Wall Street there is an increasingly smaller group that has the illusion of a friendly restructuring and with a high Net Present Value (NPV), the market value of the new bond package that is they receive in the restructuring ”, he warns. And he adds that “with the passage of time, there is a certain dose of realism, which follows the line enunciated by Professor Stiglitz, that Argentina needs an elevated takeoff. The process will be longer than the hopeful statements of the government to do something fast. ”

For his part, Alberto Bernal, from XP Investments, told Clarín that “Guzmán has to arrive with news about the amortization of Buenos Aires, and must leave a conciliatory message with investors. If not, this thing gets very complicated. A message that implies a decent offer and that announces that you want to move forward quickly. Hopefully the government does not take the road of confrontation. ”

Regarding the general plan of the Government, Bernal believes that “the intention is not to kill bondholders with an aggressive offer. I think the government understands that the cost / benefit of being very aggressive is negative, because if the offer is aggressive, investors will not participate and Argentina will default. If Argentina goes into default, the peso will lose even more value, and inflation will not fall. In addition, Vaca Muerta financing would be put at risk. ”

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