ARGENTINA: Republic of Argentina (ARGENT; Caa3pos/CCC/CCC): Feb. Inflation

RRP usage falls to the lowest level since mid-April 2021 this afternoon: $67.670B vs. $76.446B on Tuesday. The number of counterparties falls to 27 from 36 prior.

Bundesbank President Nagel said Wednesday the Bundesbank is set to publish a debt brake proposal after the German parliamentary elections on February 23, Bloomberg reports. All mainstream parties except the pro-business FDP have signaled at least some readiness for reforms following the vote. 

• A qualified majority would be needed for Bundestag passage.
• While any actual adjustments will come down to the political process, the Bundesbank might try to provide some input for the ongoing debate on the topic, and indeed, it already had published a debt brake review proposal in April 2022 - some key excerpts from that below:
  • A proposed change on the cyclical adjustment of the net issuance allowance would allow "more time to adjust in the event of revisions to expected economic developments and tax revenue forecast errors. This would make it easier to stabilise budgetary policy and avoid procyclical stimuli."
  • Some additional adjustments would make sure that "in contrast to the increasingly flexible manner in which the debt brake is being used [it was suspended four consecutive years 2020-23], such reforms could reinforce its binding effect. Specifically, budgetary developments could be stabilised by recording interest expenditure on an accruals basis. In addition, credit balances on the control account resulting from not borrowing up to the borrowing limit could be netted against emergency loans."

• Date $MM Issuer (Priced *, Launch #)
• 02/12 $2.25B #Bell Canada $1B 30.5NC5.5 6.875%, $1.25B 30.5NC10.5 7%