For some time, Argentines have seen their pesos weaken and lose value in the face of inflation. Taking into account also the context of uncertainty facing the Argentine economy in the framework of an election year, there are several who consider that taking refuge in dollars is one of the alternatives to cover themselves against this type of event.
But due to restrictions on accessing the purchase of US currency through banks and a very volatile blue, the possibilities are increasingly limited. However, there are still options to dollarize and obtain profits of up to 19% per year to safeguard and make the money profitable.
According to the Head of Research of IOL invertironline, Maximiliano Donzelli, "so far this year, the US currency has appreciated more than 40.6% against the Argentine peso, so investing in instruments that also adjust for the variation of the dollar, such as negotiable obligations, which also offer passive income, is a good way to boost savings. "
There are options to dollarize and obtain profits of up to 19% per year. Photo: Shutterstock.
What are negotiable bonds?
They are private debt instruments that can be traded in the Capital Market. In simpler words, they are bonds that can be issued by large companies and that can be bought and sold on the Buenos Aires Stock Exchange.
When a company needs funds, it can borrow them through the issuance of negotiable bonds, also known as NOs that operate on the local Stock Exchange.
In this way, the company contracts debt with the bondholders, who are the investors who bought those securities, and undertakes to cancel that debt within the agreed period together with the corresponding interest.
The principal of the obligations is generally returned in annual or semi-annual installments called amortizations, and generates an interest that can be fixed or variable rate, called rent payment.
To better understand what it is, the coordinator of the UADE Finance Laboratory, Karina Díaz, in dialogue with Clarín, gave an example comparing the NO with a loan.
"When a person asks for a mortgage loan, for example, what he does is request money. Then you will have to return that amount to the entity that gave it to you, along with interest. In this case the same thing happens: the issuer of the negotiable bonds asks the investor for money and then will return the capital and pay interest, "he described.
Argentines see their pesos lose value in the face of inflation and seek refuge in dollars. Photo: Reuters
How much can you earn by investing in negotiable bonds?
"Negotiable bonds are very useful to protect you from dollar inflation. In fact, at the moment, inflation in the United States remains at high levels, 5% year-on-year, this means that saving in liquid dollars generates a significant loss of value in the coming years, "said Donzelli of invertironline.
Meanwhile, he explained that although there are traditional fixed income investments that used to at least match inflation in dollars, "today none of them work as a hedge. Either because they have a yield below inflation or because they present a high risk," he said. And he recommended some options to consider, depending on the profile of the investor.
. Conservative/moderate profile
The instrument of negotiable obligations (ON) of Telecom, one of the main telecommunications companies with more than 28 million users (Telecom - TLC5O) pays coupons semiannually at an annual rate of 8.5% and pays the amortization of capital in four installments from 2023, thus diversifying the risk. To date, the ON has an annual return in dollars of 8.4%, offering good returns.
The ON IRSA 2028 – IRCFO instrument pays semi-annual coupons at a rate of 8.75% and pays amortization in 5 installments from June 2024. To date, the NO has an annual return in dollars of 7.5%. It is worth mentioning that IRSA is the largest Argentine real estate investment company and the only Argentine real estate firm that trades its shares both in the local market and on the New York Stock Exchange (NYSE).
In addition, it stands out for the positive evolution of solvency ratios, and the good performance in terms of revenues shown during the last 3 years.
. Aggressive profile
The YPF 8.5% - YCA6O negotiable obligation, maturing in 2025, offers high returns of around 13.7% per year in dollars, given its low price and semi-annual payment structure at an annual rate of 8.5%.
The share price is hit by factors outside the company that do not necessarily reflect the state of the national company, and which has stood out for the good performance in revenues and low levels of indebtedness (being among the lowest in the sector).
The ON GMSA 2027 – MRCAO pays coupons semi-annually at an annual rate of 9.625% and amortizes the capital semi-annually until maturity, which reduces risk substantially. In addition, the bond offers an annual dollar yield of 19.1% to date.
Negotiable bonds offer a passive income that boosts savings. Photos: Diego Waldmann
Step by step, how to start investing
1. Choose an ALYC agent (Settlement and clearing agent), or better known as a broker or financial agency, such as InvertirOnline, Portfolio Personal, Balanz, among others.
To gain security, it can be verified that the selected entity is authorized by the National Securities Commission (CNV) and that it appears with a registration number on its website.
2.Open an investment account. This management is quick and simple and is done through the website of the agency with which you have chosen to operate.
A selfie of the face, a photo of the front and another of the back of the ID and some personal data will be requested. It is 100% online, with no opening or maintenance costs.
3. Enter money to the Investment account through a transfer of pesos or dollars. It must be from a bank account, in which you are the holder, to the account that appears on the page of the financial agency. Once the money is credited, you can start trading.
In the case of dollar-negotiable bonds, it is as if you were going to buy a bond or a stock. There are some that do not have a minimum amount to start investing, although it is recommended to do so from $ 100, or its equivalent in pesos $ 47,300 (at MEP dollar value). There are others that do require a minimum of $ 1,000, it depends on the ON.
When can negotiable bonds be sold?
While marketable debentures can be held to maturity, an investor can decide to sell them in the market at any time prior to that date.
This can be done either because the investor needs the money he invested or because he finds a more profitable investment in the market and wants to change it.
LN
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