On July 21, the Senate Budget and Finance Committee, chaired by Carlos Caserio (Frente de Todos – ruling party), approved the bill on the sustainability of local-law public debt. The initiative, presented by the Executive branch last week, is ready to be discussed in the next Senate session, which could take place this week.

Although the ruling party advanced with the signing of a majority opinion, Caserio promised to accept modifications during the session. However, Juntos por el Cambio decided to issue a dissenting opinion as they consider that the article including the RUFO clause (Rights Upon Future Offers) would place local bondholders at a disadvantage vis-a-vis foreign creditors.

The meeting was attended by Finance Secretary Diego Bastourre who said that “the proposal is sustainable, and manages to avoid tensions, but at the same time it must be understood that we have reached a limit regarding sustainability. Continuing to ‘improve the offer,’ as they say, undermines the principle of opportunity.”

He added that the amount for which authorization from Congress is required comes to USD 41.7 billion. “There is an incentive which is aligned to interests: holders signing up early to the offer will accrue interest up to September 4, whereas those entering later will only accrue interests until April 6,” he explained.