Government refinanced 566,000 million pesos in 2022

It has contributed to extending the average term of the Federal Government’s internal debt portfolio from 7.3 years, at the end of 2021, to 7.8 at the end of 2022”.

Annual Financing Plan 2023, SHCP

The government of Andrés Manuel López Obrador carried out a total of nine swaps in 2022, that is, it sought to improve the conditions and characteristics of the debt contracted in the local market, in accordance with what was published in the Annual Financing Plan for 2023.

The document, prepared by the Ministry of Finance and Public Credit (SHCP), reported that the nine swaps that were carried out in 2022 added a withdrawn amount of 566,000 million pesos (mdp).

“With this, it has contributed to extending the average term of the Federal Government’s internal debt portfolio from 7.3 years, at the end of 2021, to 7.8 at the end of 2022, reducing liquidity pressures in the short term, in addition to allowing debt holders to recalibrate their portfolios”, explained the agency in charge of Rogelio Ramírez de la O.

The largest debt refinancing in the local market was carried out in August, through a cross swap of Bondes D and Bondes F, for an amount of 158.149 million pesos, indicated the data from the Annual Plan.

Meanwhile, at the beginning of last year another cross swap of Bonds M, Udibonos, Cetes, Bonds M and Bondes F was carried out, which allowed the agency to refinance debt for 132,891 million pesos.

The year with the greatest amount of change in the amortization profile was 2022, with 233,414 million pesos, followed by the period from 2024 to 2026, where 272,133 million pesos were placed and 160,670 million were withdrawn.

The Annual Financing Plan for the coming year stipulates that the debt management strategy for the following year is based primarily on covering financing needs, for which reason preference will be given to long-term, fixed-rate internal debt.

external market

Regarding the debt contracted in the external market, the Ministry of Finance explained that between July 2019 and December 2022, 10 refinancing operations were carried out.

The aforementioned refinancings, he added, were executed via early repurchase.

Of the nine refinanced bonds, four were in dollars and five in euros, and matured between January 2021 and January 2025, for an amount of 14.160 million dollars.

“Likewise, six liability management exercises were carried out between July 2019 and January 2022, which allowed the Federal Government to achieve refinancing benefits of 10,000 million dollars. By adding both efforts, this administration has achieved a historic amount of external market debt refinancing for a total of 24.160 million dollars in just three years,” he added.

According to data from the Treasury, the greatest decrease in foreign debt amortizations for one year occurred in 2023, when it fell 91%; while for 2021 they were reduced by 80%; in 2022, 74%; in 2025 they were reduced by 70% and by 2024, the last year of the current administration, amortizations will be 57% lower.

Relief for next government

In recent days, López Obrador assured that, with the debt restructurings that have been carried out in the external market, the financial burden for the incoming government in 2025 will be alleviated. “We are looking for the next government not to have the pressure that we had at the beginning”.

The president pointed out that the restructurings have helped reduce the financial commitments that the incoming administration will have, contrary to what happened with his government when he came to power.

“I am no longer thinking only about how to end (the six-year term), which I am sure we will end very well, but how to leave the next government slack, not how (Carlos) Salinas left (Ernesto) Zedillo, with the economy on pins”, assured the Federal Executive.

In this sense, López Obrador indicated that regarding the external debt, in 2025 – which would be the first year of the next government – ​​half of the debt interest of what his current administration paid will be paid.

“It is no longer just next year, nor 2024. (We seek) that by 2025 there will be no financial pressures. We are acting very responsibly in that regard… Financially, we already have it figured out,” he added.

ana.martinez@eleconomista.mx