The appetite returns to the market for an instrument that acts as an oasis for those seeking to avoid risk

With investors who sense that the definition zone is very close and in a context in which It will be necessary to see if Argentina manages to return to the international debt marketswhich drives the national fixed income (which includes negotiable obligations), and with the problem between the Government and the provinces out of the sight of investment capital, the conditions are in place for an opportunity in the ONs.

The hard time of Negotiable Obligations

Market sources pointed to Ambit that the last few months were hard for the ONs. “In February they did quite poorly and had no capital gains. They only offered positive returns due to the accrual of coupons”, that is, The parities fell, but the payment of coupons was enough to compensate for that fall.

This, the source explains, is because There is little appetite for Argentine corporate debt in international markets“and that, if they seek to locate abroad, they will probably have to do so at a high rate.” Therefore, companies seek to do so locally, where the stocks generate a kind of artificial demand.

However, this was not the case in all cases. From a company that went out to seek financing last week, they told this medium: “It is not our case. We placed last week with an oversupply of 20%, 7% in the dollar section and BADLAR plus 0.99% in pesos”.

Negotiable obligations: the loss of appetite in the market

Pablo Repettohead of Research at Aurum Valores, has a vision about why the lack of demand for ONs on the market and makes three essential points in this regard:

• Changes in investment preferences: mentions that there was a change in the investment paradigm, with a decrease in the demand for linked Dollar and Hard Dollar in favor of CER instruments, as well as the passivity of the crawling peg.
• Greater risk tolerance: Repetto suggested that optimism led to a greater tolerance for risk, with investors not only maintaining demand in sovereigns, but also investing in leading stocks and BOPREAL. “This increase in risk tolerance could be related to a more positive perception of the economic environment,” she warns.
• Differences in Performance: Despite the high “spreads” in sovereign rates, it is highlighted that a corporate performance “from 7% to 8%” may be attractive to those seeking returns without taking on too much risk.

Negotiable obligations: what the City says about this instrument

The investment advisor, Gaston Lentinifor more than six months it has maintained that the ONs “they are very expensive”. In dialogue with this medium, he added to his opinion that the case of domestic corporate debt “It is very particular”.

This is because there were a lot of companies that raised “capital from the market at a rate close to 6.5%.” And here is where Lentini invited “reflect“Well, consider that, today, many dollars in walletsfew investments and being patient, is also a good decision.

And it states that, “The US Treasury pays 5% for the shortest bonds. So, all the Argentine risk has a cost. For these companies it is 1.5%. The difference between what the US Treasury pays, which is considered risk-free, and what companies here pay.” For Lentini, “everything that Argentine risk implies it is not worth 1.5% annually”. And that is why it keeps recommendations to clients to buy or go out to bid ONs on the sidelines.

“Why do I say this? Because there are many investors with cash dollars without knowing what to do. People who have dollarized and today do not know what to do with those dollars. So, being patient seems to me to be the most important thing,” she warns.

ONs: the refuge of the conservative investor

Argentine negotiable obligations currently “They are the refuge of the conservative investor and that keeps them at historically high price levels”, he maintains for his part Maria Moyano HidalgoInstitutional Sales Trader of Adcap Grupo Financiero.

And, as Moyano explains, the resilience that this instrument has demonstrated and “the responsible behavior of companies to reduce their debt levels and accumulate cash” have supported corporate bond prices during the last periods of high stress in Argentina.

So what is the strategy to follow?

To date, the majority of ONs They tend to be quoted in the market above their parity value, which could be considered a price higher than its fair value. This scenario poses an interesting situation for investors, “since acquiring one above parity implies a greater risk of loss of value compared to the possibility of gains”Warns Lentini.

The strategist maintains that it is important to highlight that interest coupons, in general, They will maintain good payment flow“since no company usually fails to comply with this obligation”, so corporate bonds become a good conservative option.

Lentini highlights that in the current context, some investors believe that economic stability will be consolidated, with the expectation of a decrease in inflation, exchange rate stability, reduction of country risk and an increase in the value of bonds. If this optimistic perspective holds, “investing in ONs may not be the most convenient option due to their high price in the market,” he indicates.

ONs: which ones the market sees

In contrast, if a more uncertain and risky outlook is perceived, with the possibility of an increase in inflation, unemployment and a depreciation of the dollar, it is advisable to explore conservative options, such as ONs. “Some that are below parity could be considered attractive alternatives”, concludes Lentini.

For his part, Moyano indicates that, currently, “We don’t see much upside in terms of prices, but Yes, you can earn between 5% and 9% in dollars” which is acceptable for a conservative investment.

Moyano shows a preference for two companies that, “in addition to being financially healthy, have growth plans.” The first is YPF Luz (with your YPFLUZ 2026 bonus) and Southern Gas Carrier (with its TRAGAS 2025 bonus), are the recommendations of the financial group it represents.

Finally, Repetto points out in conclusion that, after a year with few investment optionstoday the demand for ONs begins to normalize“which is for more conservative investors who have and/or need dollars, but they do not want to enter sovereign risk”.

Thus, despite the large spread between the 20% – 30% rates of sovereign bonds, A 7% or 8% corporate return is useful if you are not looking to absorb so much risk. That is the consensus among analysts after the return to the ring of the ONs.