Negotiable Bonds Boom: The Keys to Betting on These Instruments That Take Off with Money Laundering

The whitewash came into effect on August 14 and since then there has been a boom in demand for the Negotiable Obligations (ONs), which was already on the rise. Although analysts are divided on the foundations of this appetite for corporate debt, the truth is that today to obtain returns above 8% in MEP dollars It is necessary to go to higher risk and lower liquidity issues.

A report by Allaria indicates that the “Hard dollar” ONs (Foreign Law) measured in dollars, rose on average 0.7% “week over week” (WoW) in the last month, with a negotiated amount of US$408 million (average of the last 10 trading sessions). According to the document, these corporate bonds stand out:

• Pan American Energy: 21-Apr-25 (PNMCD) 4.5% WoW.
• YPF S.A..: 7-21-27 (YCAMD) 2.6% WoW.
• Pampa Energy SA: 24-Jan-27 (MGC1D) 1.4% WoW.
• Telecom: 18-Jul-26 (TLC1D) 1.2% WoW.

Meanwhile, since Adcap Financial Group, They point out that the ONs should be the preferred asset by investors entering the money laundering, given their conservative profile. The broker foresees some compression of “spreads” in the short term and, as a result, it is possible that they will present a total “upside” of 1% and 1.6% with respect to the current price.

ONs under the magnifying glass of analysts

Juan Pedro Mazzastrategist of Cohen, confirms in dialogue with Scope that in the last month the demand for ONsThe analyst explains that this could be based on money laundering, since “those who enter can avoid paying the 5% fine if they invest in Argentine assets.”

For this reason, Mazza indicates that the corporate credits They are presented as the ideal alternative due to their low volatility and lower exposure to sovereign risk. As a result, in the local market, the highest quality ONs are offering internal rates of return (IRRs) between 4% and 7% when a few weeks ago were around 8%.

In dialogue with this medium, Leo Anzalonedirector of the Center for Political and Economic Studies (CEPEC)believes that the boom in demand for bonds has more to do with the volatility that characterizes the Argentine market. And, as he explains, a negotiable bond from a large company is much less risky than a bond such as the Bonar 2030 (AL30) or the Global 2035 (GD35).

In fact, Anzalone highlights the returns on negotiable obligations of around 7%, 8% and 9% and the aforementioned bonds, which are around 30%.. And in general, sovereign bonds are much less risky than corporate bonds in the rest of the world, such as in the US, which has the safest asset in the world: Treasury Bills (T-Bills). “But in Argentina, the risk of default is always present and, therefore, the most conservative investors prefer low-risk bonds from large companies and not so much sovereign bonds, which governments may not pay.”

Thus, as Anzalone explained, investors who enter into money laundering seek not to expose the regularized resources to the inherent volatility of sovereign bonds and prefer a lower, but safer return.

Along the same lines, it is expressed Leandro Villalbaportfolio manager at Argenfunds, who argues that when analyzing negotiable obligations, it is necessary to consider the legislation under which they were issued, that is, local law or New York. “This is important because in the event of non-compliance with the conditions, the court of the country where they were issued is the one that will carry out the litigation. Having said that, the market usually shows a broad preference for negotiable obligations under NY Law because they have greater legal security than local law,” he analyzes.

Negotiable Bonds: Which ones yield more than 8%

And thus, a greater demand for corporate securities raised the prices of the ONs and, as a result, compressed dollar rates. It should be noted that 8% is a yield that the market considers “good” for debt directly linked to local companies.

Villaba suggests that for a conservative investor, Negotiable Bonds under the NY law are the best option. Good returns can be found in relation to risk, such as Telecom 2026 with an IRR of 8.8%, YPF LUZ or YPF 2031 itself, both with IRRs above 8%.

Mazza explains that, to obtain returns higher than 8% in MEP dollars, it is necessary to go for higher risk and lower liquidity credits, such as Edenor 2026 (DNC3O), Raghsa 2026 (RAC6O) and San Miguel 2026 (SNABO). The investor must always remember that in, the higher the IRR, the higher the risk.

From Adcap, for its part, They recommend entering the repurchase for YPF 2025 holders and analyze as “a good alternative to acquire YPF 2026”for the investor with a more conservative profile.” Meanwhile, for those more prone to risk, “there is no value in entering the repurchase” for the holders of YPF 2027, where Adcap prefers to “wait for the ‘upside’ that the money laundering can generate.”

Thus, for investors with a higher risk appetite, Adcap believes that the new YPF 8.75% 2031 is worth consideringwhich is trading at par and could generate an upside of 2.5%, as a result of the compression of “spreads” that the broker expects due to the money laundering.

Finally, Anzalone suggests that, for those who seek higher returns and like risk, There are ONs that pay up to 17%, like GEMSAfor the more conservative, YPF, which pays 7/8%. But remember, “here it is important not only to consider the IRR and its consequent implicit risks, but also to foresee how long it takes for a NO to “return” the investment and also when it matures. “As we always say, in these cases, it is essential to seek advice,” he points out.