March 23, 2017

The Minister of Finance, Luis Caputo, presided a meeting this afternoon with journalists of graphical media to announce, together with the presidents of the three public banks, the new policy to promote credit. Within that framework, Javier González Fraga (Banco Nacion), Juan Curutchet (Banco Provincia) and Javier Ortiz Batalla (Banco Ciudad) presented the main characteristics of the credits for access to housing that public banks will offer for the middle-class sectors.

Minister Caputo highlighted that “public banks have to serve the productive sector and to maximize the contribution to the real economy; that is the objective we are pursuing, in this case with mortgage credits”.

The Minister of Economy of the Province of Buenos Aires, Hernan Lacunza, and the Ministry of Treasury of the City of Buenos Aires, Martin Mura, were also present. They announced the submission of a Bill to reduce Gross Income Tax a 1.5% for the mortgage credits of their respective jurisdictions in every bank.

Credits aimed at housing acquisition may be cancelled in a period of up to 30 years: 360 installments that will be adjusted by Purchasing Power Unit (UVA, for its acronym in Spanish) and it will develop according to the Consumer Price Index.

In that sense, Caputo highlighted: “This process of credit recovery that began at the end of last year will have an enormous impact with these mortgage credits that are now part of Procrear, and we are going to develop an even greater market once private banks come into scene”.

Public banks will finance between the 75% and the 85% of the real property value, up to ARS3,1000,000 in the case of Banco Nacion; Banco Ciudad won´t have any limit regarding the real property value and it will lend up to ARS2,000,000 for the acquisition of used and new houses; and Banco Patagonia ARS2,700,000.

In order to access a million-pesos credit, a family group will need incomes between ARS18,500 and ARS24,000, respecting an installment-income relation that varies between the 25% and 30%.

In this sense, Gonzales Fraga said: “For the same cost of a rent, we are giving a family the opportunity to become owners and this is a different Argentina”. Likewise, Ortiz Batalla highlighted: “The 31% of UVA credits nowadays is given by Banco Ciudad and this initiative becomes part of it and it is mainly for the middle-class sector. Nevertheless, the mortgage credit is below 1% of the total product, we have a long path to walk”. On his part, the head of Banco Provincia said that “public banks must play a social role, it is the objective of our institution and of the Governor of the Province, and we have the opportunity to materialize it in the mortgage credit”.

The rates and the amounts of the installments also vary according to each bank. Banco Nacion will apply an interest rate of 3.5% for its clients and of 4.5% for the rest of the public, and it is estimated that the monthly installment will range between ARS4,600 and ARS5,000 for every million pesos lent. In the case of Banco de la Provincia de Buenos Aires, the installment for every million pesos will be around ARS5,931 for its clients with a preferential rate of 5.9% and a rate of 7.5% for the rest of the public. In Banco Ciudad, with an interest rate of 5.9%, beneficiaries will pay an installment of approximately ARS5,993.

Banco Ciudad will have the information available as from next Monday and Banco Nacion and Banco Provincia in the following weeks.

March 20, 2017

The Minister of Finance, Luis Caputo, announced this Monday, together with the British Minister of Trade, the approval of a credit for 1 billion pounds (1.25 billion dollars) offered by the UK Export Finance for projects of exports to Argentina. This way, any enterprise of the UK that wishes to invest in Argentina will be able to access this flexible credit, one of the biggest four for Latin America (together with Mexico, Peru and Chile) and it has very attractive requirements.

Within this context, Caputo highlighted the importance of the announcement: “This agreement with the UK strengthens our position as a productive investment destination, which will bring us more development opportunities”, and he added: “In addition, with this type of financial agreement, Argentina’s foreign trade is favored and thus more and better jobs can be created”. In addition, Hands highlighted in an official release: “Argentina has huge potential to be a modern vibrant economy, and the United Kingdom has committed itself to support the country by means of a constructive relation in areas such as energy, agriculture and infrastructure”.

Both officials held a meeting this morning at the Ministry of Finance, where they talked about the most relevant issues on the bilateral agenda for 2017. The British Ambassador, Mark Kent, and the Chief of Cabinet of the Ministry, Pablo Quirno, also participated in the meeting.

Greg Hands developed a tough working agenda in his visit to Argentina that included meetings with the Ministers of Production, Transport and Tourism, legislators and businessmen. The principal objective of his visit is to announce measures to promote trade and bilateral investment, finance exports and make progress in air services agreements.

UK Export Finance is the UK’s export credit agency that approves loans, insurance policies or bank guarantees with public resources of the UK to help UK companies access export finance.

British authorities highlighted that bilateral trade relations between Argentina and the UK have growing potential. Only in the third quarter 2016 British exports to Argentina increased an 8% compared to the third quarter 2015. Within the main export products we find: pharmaceutical supplies, precious metals, power generation equipment, precision tools, alcoholic and non-alcoholic beverages and electrical equipment and machinery.

The United Kingdom is one of the main investors in Argentina, with a contribution of more than 2 billion dollars in a direct foreign investment and more than 100 British businesses with representation in Argentina.

The British delegation was also comprised by the British Ambassador, Mark Kent; the Director of Trade and Investment in Argentina, Tim Hanson; the Trade Assistant of the British Embassy, Sonia Aponte Tinao; and the regional representative for Latin America of UK Export Finance (UKEF), Sam Hoexter.

March 14, 2017

The Council of the Andean Development Corporation (CAF, for its acronym in Spanish) approved this Tuesday in Panama the financing for 130 million dollars for the second stage of the Río Colorado – Bahía Blanca Aqueduct Project. The Chief of Cabinet, Pablo Quirno, and the Undersecretary of International Financial Relations, Félix Martín Soto, participated in the CLIX Board of Directors Meeting.

The approved Project will be executed by the Province of Buenos Aires and the CAF will be financing the 80%. The local contribution will be of 32.22 million dollars, amounting to a total of 162.22 million dollars. In addition, the 15-year loan includes a 54-month grace period.

This infrastructure investment consists in the building of a new system of water provision for the population and industry of Bahía Blanca and nine nearby locations. This way, this second stage completes the first stage of the project which has already been financed by the CAF with 150 million dollars.

Likewise, the comprehensive Project is comprised by a 140-km aqueduct that connects the cities of Pedro Luro and Bahía Blanca. It also includes an intake work and a purification plant in Pedro Luro, four cistern tanks and two pumping stations. According to the data calculated by the Province of Buenos Aires, the agreement will benefit 450 thousand residents of the region and it will provide the necessary infrastructure for sustainable growth in the industrial sector.

In addition, the CAF Board of Directors Meeting held this week in Panama was the last one presided over by Enrique García, Executive President of the organization as from 1991, and he will be replaced by the new elected President, the Peruvian Luis Carranza.

The CAF is a development bank, founded in 1970 and comprised by 19 countries and 13 private banks of the region, that promotes a sustainable growth model through the support of public and private-sector projects in Latin America. Within this framework, the Shareholders Meeting is its governing body, in charge of approving the annual report of the Board of Directors, the financial statements properly audited, and determining the allocation of the profits earned.

The National Government has obtained the SEC’s authorization to improve the access conditions to Argentine bonds by U.S. investors, after completing the pertinent information procedures. The SEC is the public entity that regulates the securities market of the United States. This authorization allows Argentina to expand the universe of U.S. investors beyond the qualified institutional investors. The registration before the SEC provides a quality seal of the information standards stipulated by Argentina for its investors at a global level.

Offers begin today, March 13, 2017, and end on April 11, 2017, 5 PM, New York time, with an extension option. In that case, the new deadlines for offers will be duly informed.

Eligible bonds to be replaced are the Global 6.250% maturing in 2019; 6.875% maturing in 2021; 7.500% maturing in 2026; 7.625% maturing in 2046; 6.625% maturing in 2028; 7.125% maturing in 2036; 5.625% maturing in 2022; and 6.875% maturing in 2027.