Government: Chubut Never Completed Process to Issue New Bond, Repay Debt

Guillermo Francos, the Minister of the Interior, has further escalated the conflict between President Javier Milei and Chubut Governor Ignacio Torres. The dispute pertains to the reduction in shared revenue funds imposed by the National Government on the province of Patagonia.

Chubut’s Governor Torres is claiming $13.5 billion in shared revenue from the National Government. The national executive, however, justifies this cut, stating it relates to a provincial debt that was secured against the shared funds.

According to Governor Torres of Chubut, the province had appealed to the National Government for debt refinancing, but received no response.

As a result, the province proposed issuing new debt secured by royalties to repay their debt to the National Government. This proposal, the province claims, also went unanswered.

Interior Minister Francos, through social media platform X, presented the National Government’s version of events.

On February 22, Francos stated that Chubut’s Minister of Economy reached out to him, requesting a new debt operation to pay off the province’s debt to the Trust Fund for Provincial Development (FFDP).

Francos refuted the lieutenant governor’s claims, stating, “We responded to their request on February 23, asking for the necessary documentation to proceed with the proposed debt issuance under current rules. We are waiting for their reply.”

Francos reiterated that once they respond, “We will review it and forward it to the Ministry of Economy as appropriate.”

The Treasury Palace confirmed this account, with a high-ranking source stating that the request for debt issuance was sent to the Provincial Secretariat of the Ministry of the Interior on February 22, and a response was sent the next day. The request has not yet reached the Ministry of Economy or the Central Bank.

The Central Bank also confirmed this sequence of events. They clarified that they only receive inquiries regarding the banks’ ability to purchase the bond Chubut wishes to issue after the Ministry of Economy has approved the issuance. They do not have jurisdiction over these approvals. The Central Bank’s role is simply to inform banks whether they can purchase the debt or not. An investor who is not a bank regulated by the Central Bank could purchase the bond without any issues.