Payment of Financial Debts and Local Debt Securities

The Argentine Central Bank (BCRA) recently issued Communication “A” 8129, introducing amendments to the foreign exchange regulations that affect access to the foreign exchange market to pay foreign financial debts and local debt securities. These measures—effective as of November 7, 2024—seek to regulate and facilitate access to the foreign exchange market.

1. Advance access to the FX Market

Access to the FX Market prior to maturity will be allowed to acquire foreign currency to pay foreign financial debts and local debt securities, provided that:

• The foreign currency acquired is deposited in local bank accounts in USD in the petitioner's name.
• Access is available up to 60 days before the payment is due.
• Access is limited to 10% of the total amount to be paid at maturity.
• Financial entities guarantee that debts to be cancelled comply with current foreign exchange regulations.

It should be recalled that before now, regulations only allowed access to the FX Market up to five working days before the due date of payment, with a daily limit of 20% of the amount to be paid.

2. Conditions for new debt securities

There is an additional condition to pay principal of debt securities issued abroad as of November 8, 2024: the principal may only be paid after 365 calendar days from the date the security was issued.

What does this Communication imply?

These new rules reflect an effort to ease access to the foreign exchange market, but with strict controls aimed at avoiding imbalances. While the measures provide some predictability for foreign debt payments, the one-year minimum term requirement for new securities may affect companies' financial planning.

If planning to enter into external debt payments or issue new securities against foreign currency abroad, it is essential to consider these new provisions to ensure compliance. Financial institutions play a key role in verifying the requirements, so it is important to work closely with them.