We adviced in a Repo transaction among the Central Bank of Argentina and certain international banks
The Central Bank of Argentina (the BCRA) arranged with five first line international banks passive pass-through transactions (the “Repo Transactions”) with BOPREAL Series 1-D securities for a total amount of USD 1 billion and a final term of 2 years and 4 months. In the initial auction, BCRA received bids for USD 2,850 million, exceeding by almost three times the amount tendered.
For these transactions, the BCRA will pay an interest rate equivalent to the SOFR-USD rate plus a spread of 4.75% (equivalent to a fixed rate of 8.8% per annum, considering the fixed-floating interest rate swaps quoted in the international market for the same term).
These Repo Transactions with BOPREAL securities provides the BCRA with a new tool to manage its liquidity in foreign currency at a lower cost than that offered by the options so far available. This new tool increases the flexibility of the BCRA to mitigate any imbalances that may exist between the supply and demand of foreign currency in the Argentine local foreign exchange market. In this way, the BCRA reduces the risks surrounding the implementation of its exchange and monetary policy objectives and facilitates the anchoring of economics expectations.
Cleary Gottlieb Steen & Hamilton acted as New York Law counsel to the BCRA through the team led by partner Juan G. Giraldez and associates Ignacio Lagos and Pedro Arango Montes, in collaboration with the BCRA’s internal legal team.
A&O Shearman acted as New York Law counsel to the five international banks through the team led by partner Donna Parisi and counsel Andrew Feng, and included partners Geoffrey Goldman and Christopher Ryan, of-counsel Antonia Stolper, partners Alejandro A. Gordano, Jessica Delbaum and Lorenz Haselberger, counsel Ryan Leske, associate Ben Halligan y international associate Emilie Ferré.
Bruchou & Funes de Rioja‘s Banking & Capital Markets Department, sole Argentine law firm participating in the transaction, acted as Argentine Law counsel to the five international banks through the team led by partners Hugo N. L. Bruzone and José María Bazán, and associate Ramón Augusto Poliche. Likewise, the team was assisted by partner Daniela Rey and associate Maximiliano Yudica Bartels for the firm’s Tax Department.
