In the exposed portfolio, an average annual return in dollars (known as IRR) is achieved, estimated at 6.7% with a modified duration of 1.8 and an average maturity of 2.1 years.
Capex (CAC2D): the company is dedicated to the energy sector in the Patagonian provinces of the country, with a diversified business in electrical, thermal and renewable energy, with a significant exploitation of hydrocarbons. The instrument pays coupons semi-annually at an annual rate of 6.875%, offering to date an annual return in dollars of 5.1%.
Telecom (TLC5D): is one of the main telecommunications companies with more than 28 million users. On the one hand, their solvency ratios seem logical and present low volatility, which is presented as one of the most positive aspects when it comes to facing debt payments. The instrument pays coupons semi-annually at an annual rate of 8.5% and pays principal amortization in four installments starting in 2023, thus diversifying the risk. To date, the ON has an annual return in dollars of 7.3%, offering good returns.
IRSA (IRCFD): It is the largest real estate developer in the country, thus having a large amount of assets in USD. The ON pays coupons every six months at an annual rate of 8.75% and from 2024 it pays annual capital installments, thus having five amortizations, substantially reducing the risk. Thus, together with this interesting structure, the bond offers to date an annual yield in dollars of 8.0%.
Aggressive Portfolio
For investors with a profile of aggressive investment we understand that they are willing to obtain higher returns at the cost of higher risk. For this reason, we prioritize the ONs that present returns above inflation.
The portfolio is made up of three ONs with the same weighting, one from the telephone company Telecom (TLC1D)another from the oil company YPF (YCA6P)and the ON of IRSA 2028 (IRCFD).
On average, the portfolio has an estimated annual yield in dollars (IRR) of 9.3% with a modified duration (see glossary) of 2.7 and an adjusted maturity of 3.3 years.
Telecom (TLC1D): the instrument pays coupons semi-annually at an annual rate of 8% and pays the capital amortization at maturity in the year 2026. To date, this ON has an annual yield in dollars of 8.6%, offering good returns.
Its solvency ratios seem logical and present low volatility, which is presented as one of the most positive aspects when it comes to facing debt payments. For those clients who trade it, we recommend a reference price of USD 99.
YPF (YCA6P): YPF’s BO maturing in 2025 offers high returns of around 11.6% per year in dollars given its semi-annual payment structure at an annual rate of 8.5%. Although the price of the instrument is not on a par with other energy companies, we highlight the good financial results of the company together with its debt recovery in recent years.
We understand that the price is hit by factors outside the company that do not necessarily reflect the state of the national company. In turn, on October 24, the risk rating agency Fitch increased the company’s rating from AAA to AA+, making it the fifth company in the country to obtain Fitch’s highest rating.
IRSA (IRCFD): IRSA’s ON maturing in 2028 (IRCFD) is issued after the exchange with a nominal amount of USD 171 million and has operated with considerable volume in BYMA (secondary market). The ON pays coupons every six months at an annual rate of 8.75% and from 2024 it pays annual capital installments, thus having five amortizations, substantially reducing the risk.
In this way, together with this interesting structure, the bond offers to date an annual yield in dollars of 7.8%.
Suggested portfolio for low amounts
Although the portfolios adjust to different risk profiles, the fact that they are made up of ONs of Foreign Law, normally leads to the minimum investment amounts being high, given that the minimum amount to operate for each instrument is between 500 and 1000 USD. Therefore, with the aim of being able to access these instruments for those investors whose high amounts do not fit their profile, we suggest positioning 47% in the Foreign Law YPF ON (YMCHD)27% in the ON of Local Law of Cresud (CS38D)and 26% in the ON of IRSA 2028 (IRCFD).
On average, the portfolio has an annual yield (IRR) of 7.3% and an adjusted maturity of 2.7 years. What stands out about this particular portfolio is that with a low minimum investment amount (approximately USD 100.18)
YPF (YMCHD): With maturity in 2026 (YMCHO) is of Foreign Law (LE) it can be operated with low amounts. This ON is guaranteed by the company’s exports, it pays coupons quarterly at an annual rate of 4% until 2023, where from then on it becomes 9%. Additionally, we highlight the good financial results of the company together with the debt recovery in recent years. To date, the ON has an annual return in dollars of 7.6%, offering good returns.
Cresud (CS38D): It is a leading Argentine company in the agricultural business that is 80 years old, and has a growing presence in the region through investments in Brazil, Paraguay and Bolivia. Regarding financial aspects, we highlight the positive evolution of solvency ratios, clearly observing improvements in terms of indebtedness.
The local law BO matures in 2026, pays coupons semi-annually at an annual rate of 8%, and has an annual yield in dollars of 6.0%.
IRSA (IRCFD): It is the largest real estate developer in the country, thus having a large amount of assets in USD. The ON pays coupons every six months at an annual rate of 8.75% and from 2024 it pays annual capital installments, thus having five amortizations, substantially reducing the risk. Thus, together with this interesting structure, the bond offers to date an annual yield in dollars of 8.0%.
Head of Research at IOL investoronline.
Source: Ambito
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