How much do they promise to pay and why does nobody buy them?

The sanction that Argentine bonds had, despite unprecedented promising returns, does not end up attracting investors. Not even the most speculative. The collapse due to the PASO effect, which resulted in a country risk of 1,860 points since the 860 that it showed before August 11, caused all interest for Argentina.

Not for less: bonds have lost more than 35% of their value in one day (Monday 12), and are currently between 20 and 25% below Friday prices before the primary.

Of course, the comments of Alberto Fernández (later belied by his economic advisers) regarding the debt did not help; nor that the rating agencies put the local securities on the verge of default.

"In this context, many frightened people have lost enough money, including local and foreign funds. But when you can badyze cold prices, these are badets that are really worth it and opportunities begin to emerge. But for the moment, people do not have a cool head for that.. On the contrary, investor fear prevails and, in this state, it is not advisable to act, "said Nicolás Chiesa, director of Portfolio Personal Inversiones (PPI).

"We think that there is still a moment to make the decision to invest in local instruments, mainly because we do not have a binary scenario (Macri or Fernández), but today Now, the alternative seems to be Fernandez and the great uncertainty now surrounding his probable government.This new president will begin to dissipate when he will show his letters (if he is finally elected president), "he said. he adds.

Specifically, Argentine bond prices look very attractive even in a "friendly" debt restructuring scenario. In the list of titles that earn the most (that is, their prices are lower), are the 2020 Bonar – which expire in October next year – with a 52% yield ., 2021 international bonds with 39% interest rate and 2024 bond (yield of 33%, all denominated in US dollars Local debt was "very cheap"):

-The The yield on 10-year bonds in Argentina is 1,388 points higher than the value of Brazilian bonds with identical term.

-Same Turkey's bonds exceed 1000 points, a country still compared to Argentina because there is also a political crisis

-The five-year term default insurance (CDS) for the local case is 2,743 basis points. This compares to the cost of the Brazilian (139 points) or even Turkish (417 units) protection contract.

– Argentina is the country with the best returns in the world, outperforming the risky markets of Zambia and Lebanon and tripling the average rate of emerging economies.

"Uncertainty about possible economic measures taken by Alberto Fernández regarding possible exchange rate splitting and sovereign debt restructuring led to a sharp decline in bonds. The optimum would be to reduce Argentine risk exposure for more moderate risk profiles and overexposure to local badets.", advises Capital Markets Argentina (CMA).

However, there is always room to enjoy it. In case of dollar debt, they recommend the very short term: Letes with maturities in 2019.

In addition, they suggest that you leave the letters by 2020 and opt for longer bonds with lower parities, such as the New York Law Par (PARY).

"As for the short and medium term bonds, they would be the most affected in the event of debt restructuring.That's why we recommend to gradually reduce the exposure as the extreme volatility becomes stabilize, "he said. CMA

They have badyzed how some of Argentina's iconic bonds would operate under different restructuring scenarios: "optimistic" (18% discount), neutral (32% of the size) and pessimistic (53.5% reduction) ).

They believe that the return potential is very low in the event of restructuring., which does not compensate for the delay between the moment of default and the exchange (in the case of Argentina, it was 4 years between the 2001 default and the first exchange in 2005).

Then, considering the current context, they say that it is more feasible to think of a "neutral" scenario, with a 30% takeoff, than the most optimistic case with a size of 20%. "We continue to recommend reducing local positions in fixed income and moving to more conservative options," they said.

Cortoplacism is what reigns on the market. According to Balanz Capital, future prospects will depend on signals from Alberto Fernández and his economic team.

"For clients with a conservative profile, we maintain our recommendation to maintain liquidity and positions on Letes with deadlines prior to the change of mandate, pending to know in more detail the policies that could be conducted in a future government led by Fernández ", they add.

"For customers with positions in Argentina, we recommend maintaining their positions, as prices currently reflect restructuring values, and even for customers with aggressive profiles, current prices offer long-term opportunities," says Balanz.

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