It allows you to tie your money to the evolution of the value of the North American currency. Learn about its operation and the options recommended by the experts.
If you already bought the 200 dollars at the official price authorized by the Government and you still have a remainder to invest, the market offers you a wide range of possibilities. But in recent times one captivated the attention of a sector for its interesting feature that stands out from the rest.
The negotiable obligations (ON) they are an instrument that both the average investor and saver have at their disposal to place your surplus pesos and make a profit after a certain time. And while its operation is relatively simpleMany people never heard of them or simply look at them with fear because they do not know them.
These ON are debt securities issued by private, who need funds for different reasons and go to the market to borrow through these papers, which have a default schedule for return. Also, this instrument can pay an interest, fixed or variable, which is also previously informed and that can be transformed into one of its main attractions.
In this way, the companies make a commitment to those who gave them money to buy their securities, and they promise to pay it in the agreed term, along with the stipulated rent. It should be noted that when this form of financing is used by the State it is called a public title.
In dialogue with iProfessional, Karina Diaz, Coordinator of the UADE Finance Laboratory, compared the NOs with a loan:
“When a person asks for a mortgage, for example, what they do is request money. Then they will have to return that amount to the entity that gave it to them, along with an interest. In this case, the same thing happens: the issuer of the negotiable obligations asks the investor for silver and then he will return the capital and pay him interest. ”
It is important to highlight that those who wish to acquire them must process a client account –The one you use if you operate with Mutual Investment Funds, for example- which is the means to move in the Capital Market and the Stock Market. If you don’t have one, it is opened through a Settlement and Compensation Agent.
How and how much negotiable obligations pay
Negotiable bonds have become an interesting investment option for the average saver
Negotiable obligations they are generally returned in annual or semi-annual installments, called amortizations, and they also generate interest, one of the characteristics that make the instrument attractive, which can be fixed or variable rate, known as “rent payment”.
But, for greater transparency, all the information must be presented at the time of your “auction”: income currencies, minimum amounts demanded by each of them and even in which banknote they will pay the creditors.
In addition the ON have a risk rating, granted by a specialized agent, external to the firm, in which the capacity of the issuer to honor the commitments and amortize the debt is evaluated. This feature is not mandatory, but having it can tip the balance in your favor with potential creditors.
“All companies that go out to ask the market for silver have to have an Issue Prospectus, which is where all the conditions of that negotiable obligation are reported. It says when it is going to be paid, the applicable law, the guarantees they offer and informs about the risks inherent in the investment, “Díaz explained.
This type of investment has different classes, which fit with the different profiles of interested parties. There are those that are short-term and they pay profitable interest rates compared to other tools (such as a fixed term) and even those that allow for a variety of currencies (you enter with pesos and you will be sure dollar linked).
In recent months, several Argentine companies have issued negotiable obligations
The company Ledesma, to cite an example, was released in mid-July and obtained, through two ON classes, $ 1.5 billion. In one he placed papers for $ 444,664,500, with a term of six months and a rate of 33.24%; and in the other, he committed himself for $ 1,055,335,500, to one year and with an interest equivalent to the Badlar rate for private banks, currently at 29.56% per year, plus 3 percentage points.
It should be noted that the ONs can be kept until the indicated expiration, but they allow the creditor to decide on their early sale and obtain a profit between the difference in the money that was disbursed to acquire it and the amount received by the new buyer. But there is not always someone willing to bid for them, if the role is not attractive. Point no less if you need liquidity and you need to get rid of it quickly.
“The retailer is participating quite a bit in these ONs. The only risk it has is that they are not very liquid if it wants to exit before maturity. If you have it to finish (until expiration) there would be no major problems“said Sebastián Cisa, head of the SBS operating table.
Among the most interesting that can be found “for sale” in dollars roles of YPF Energía Eléctrica S.A, issued in 2019 and maturing in May 2021 (pay in interest a Annual nominal fixed rate of 10.24%) e IRSA (Class I, issued in May 2019 and maturing in November of this year that returns 10% fixed annual interest).
Pampas, a company that has an interest in Edenor, Transener, TGS, Petrolera Pampa and PESA has an issue of ON in dollars with coupon 7.5% per year and expiration in 2027.
Notably The conditions of the profits promised by the ON companies issued before the economic crisis and the pandemic are very different from the current ones, where we talk about the linked dollar, which has the particularity that both the rent payments and the amortization of capital are made in pesos according to the reference exchange rate of the issue.
What are the recommended ones when dollarizing your portfolio
With the negotiable obligations you can invest the pesos and follow the evolution of the dollar
When the investor does not have the possibility to buy more dollars at the official price because the limit of US $ 200 per month has passed, he can resort to certain ONs to invest in pesos and obtain a refund at the end of the term of this paper updated to the exchange rate value.
“In the last months in the market they began to appear many ON issues tied to the dollar. These are called linked dollar, than they are associated with the evolution of the exchange rate that is officially communicated“Díaz explained and recommended them for those who want to dollarize their portfolio.
As an example, the case is highlighted Pan American Energy (PAE), which successfully placed negotiable obligations in mid-July. He did it in three series: he obtained US $ 20,298,845 for the first, with a term of two years, and a rate of 0%; and another US $ 57,585,842 for the second, for three years and an annual interest of 1%. The third, in pesos, was placed for $ 3,000 million, for a year at Badlar, plus 1.5 percentage points.
“Class 1 had a lot of stakeholders, because the market put in more money than PAE ended up offering. The new fact is that the company borrowed at 0%,” said the UADE specialist, who also highlighted that investors supported this company action “because prefer to collect these pesos updated at the exchange rate of the dollar on the payment date”
“The linked dollar ONs, in general, are being issued at a zero rate and then end up trading at a negative rate. This has already happened in the previous Kirchner government. It occurs when the exchange rate is trodden and one has an expectation of devaluation“said Nicolás Chiesa, director of Personal Portfolio.
Consulted by iProfessional, the doctor of economics Agustin Monteverde, described the ONs, in general, as one of the alternatives that stand out within the range of investments that the average saver can access, but put the focus on the adverse context that companies must face due to the economic decline that the Argentina.
“The risk of cessation of payment by any of the issuers of these ONs is not lessr “, remarked the specialist and pointed out that” they can present the attractiveness of being private risk and not public risk. But they are reached by the risk in general in a country where it is possible to be nationalized to pure DNU “.
In line with this warning made by Monteverde, different companies came to the market to place new ONs to stretch upcoming maturities. YPF made a successful proposal in which it offered to those who accepted the exchange of its Class XLVII negotiable obligations, due in March 2021, a cash payment and a new series of ONs with final maturity in 2025.
This new title allows for every $ 1,000 nominal value of the XLVII Class, the inverter Get $ 100 in cash and $ 950 in the new ON Series XIII series which will also have four annual amortizations from 2022 and will keep the same coupon of annual interest of 8.5%.
Real estate developer IRSA is another strong player in the market. Reported the conditions of its ON Class VII, denominated in dollars but also payable in pesos, with Issue date July 21, 2020 and expiration January 21, 2022. These pay a 4% annual interest rate, along with quarterly payments scheduled since October 21, 2020.
Are they an interesting instrument for your weights?
Negotiable obligations appear as an alternative to the traditional fixed term, among other investment instruments
Many people lean towards the traditional fixed term as a tool to place their weights and make a profit or simply use it because it is the only method they know of to invest their money.
But the system has different tools and what is known is not always the best and safest. The scenario invites research, movement and information, to know which of those available is best suited to the profile of each user and the risks they are willing to take. Instruments must be available to people and not vice versa.
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