Sovereign bonds triggered coupon payments: what to reinvest those dollars in?

This Tuesday the Government paid the due date of almost US$1.6 billion to the bondholders restructured by the former Minister of Economy, Martin Guzman in 2020. Payment was secured through the non-transferable 10-year letter to the Central Bank to dispose of those funds. In this way, investors Bonares (Local Law) and Global (Foreign Law) they charged a interest depending on your position of these bonds in your portfolio.

Sovereign bonds in dollars charged the following amounts for every US$100 of nominal value:

• AL29/GD29: $0.50
• AL30/GD30: $0.375
• AL35/GD35: US$1.8125
• AE38/GD38: $2,125
• AL41/GD41: $1.75
• GD46: US$1.8125

Thanks to this, investors will have a flow of dollars in their portfolios and They will have to decide what to do with this capital.

Sovereign bonds: coupon payment, what to do with the dollars?

From IOL Invertironline They explained the value in reinvestment of the coupons on the same bonds, while finding that these interest rates look attractive for a medium-term investment.

“The strategy is more medium-term, betting on the stabilization of the economy and that at some point the macro begins to improve. The prospects for the change of government, the drop in the yield of US bonds greatly helped the recovery of the Argentine bonds, bringing them to levels more comparable with their emerging market peers” they estimated.

And they added that, the other way is “rotate the coupons towards some Negotiable Obligation (ON) in Dollars. For investors who do not wish to increase sovereign risk in their portfolios, the corporate bond curve has securities that provide returns above the average corporate bonds. “high yield” emerging and whose issuers have solid balance sheets, such as YPF 2025 (YCA6O)”, they indicated.

For its part, since Inviu they affirmed Ambit that as a destination for those dollars is the possibility of “reinvestment of the same bond at low coupon amount or maybe a Schroder Income for those who want to diversify towards LATAM risk.”

Finally, the Income Trader team at Adcap Financial Group considered that the most convenient thing is to reinvest the coupons. “Whoever buys bonds in general is to obtain a fixed annual return, in this case, I would recommend reinvesting the collection of the coupons in the same bonds that already have purchased.”

This reinvestment can help the local debt that today deepened falls, can be recomposed.

Markets: bad day for dollar bonds

The dollar bonds lows deepened this Tuesday, January 9 and risk country during the day it surpassed the 2,100 points for the first time in seven weeks. For their part, the CER titles they finished mixed. This happened on the day in which the treatment of the omnibus law in the Chamber of Deputies.

In it local marketthe dollar securities those who fell the most were Bonar 2035 (-4.2%), the Global 2046 (-4%), Bonar 2038 (-3.8%), the Bonar 2041 and the Global 2030 (-3.3%). The only title that ended without variation was the Global 2029.

In NYthe titles also closed with drops of up to 4.7%, led by the Bonar 2038followed by Bonar 2041 (-4%) and the Bonar 2035 (-3%). While the only ones who advanced were the Global 2029 (+1.1%) and the Global 2038 (+0.6%).

Consequently, the risk country rose 1.8%or 36 units, up to 2,082 pointsas measured by JP Morgan. In this way, he touched maximums since November 23 of last year, when he reached 2,112 basis points.