In an inflationary economic context and with falling interest rates, the fixed term is losing ground as an investment tool and people are looking for alternatives that offer a better return on your savings. One of the best, which is one of the stars of the market within fixed income options, are the Negotiable Obligations (ON).
ONs are financial debt instruments similar to bonds, but issued especially by companies to obtain financing from the general public, which acts as investors. They have a pre-established interest over time, just like a bond. Thus, the payment scheme and the income that you will obtain are known in advance.
An interesting fact is that ONs can be subscribed in pesos, in US dollars or through the delivery of other ONs, it depends on the emission conditions of each one. But they are a very interesting alternative for those who have dollars and want to make them yield above the fixed-term rate.
What is the average performance according to the last ONs that were carried out?
The last tenders were tied to two types of rates: Badlar plus an extra percentage of up to 6.99% in the case of those that pay interest in pesos and up to 6.25% interest for those that pay interest in dollars.
Details of the latest tenders with their types and performance:
Celulosa Argentina SA:
Dollars: 9.25% annually
Pesos: Badlar + 6.99% annually
Tecpetrol SA:
Dollars: 5.98% annually
Edenor
Pesos: Badlar + 3% annually
MSU Energy
Pesos: Badlar +3% annually
Dollars: 8.25%
Genneia SA
Dollars: 6.25%
Dollars: 5%
Petrochemical Comodoro Rivadavia SA
Weights: Badlar + 0%
YPF LUZ SA
Linked Dollar: 3%
Dollars: 6%
The Badlar interest rate is the one published by the Central Bank for fixed-term deposits greater than one million pesos from private banks within a period of 30 to 35 days. While the dollar linked rate means that the returns are paid in pesos, but are linked to the official exchange rate of the dollar. It adjusts to the evolution of the North American currency from the issuance to the payment date. Ideal to hedge against fluctuations in the official exchange rate.
How to invest in Negotiable Obligations?
To invest in ON, the operation can be carried out on the different fintech platforms that have the options and in banks both online and in person.
It is important to remember that you can invest in both pesos and dollars, and that they all have a minimum amount.
What type of companies participate in these tenders?
The companies that issue Negotiable Obligations belong to different sectors: energy, mass consumption, agriculture, among others. Generally, these are firms that seek resources in the capital market to finance investment projects, acquire assets or to refinance and/or restructure liabilities or other productive activities.
Those who invest in Negotiable Obligations (ON) buy part of the company’s debt and instead of becoming partners, they become creditors.
In this sense, a share differs from a bond mainly in that the buyer of the share becomes the owner of the firm, in proportion to the amount he has acquired.
Is there an established duration period for negotiable obligations?
The term is established by the company in the Subscription Notice, according to its own characteristics, the horizon of its investment projects or its financing needs.
How are negotiable obligations paid?
The payment of capital may vary according to what is established by the company in the transaction documents. It can be everything at maturity or in installments.
Capital amortizations and/or interest payments can be: monthly, quarterly, semi-annual or annual. Additionally, payment is upon maturity with the possibility of establishing grace periods to initiate payments.
Source: Ambito
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