I want to be clear on something before I keep on posting ideas based on Argentinean assets. It does not have much to do with me being from Argentina. It has everything to do with the fact that when a Bolivian 10 year bond trades at a yield at around 5%, a same duration bond from Argentina trades at a 14% YTM. Yes, it only has to do with the fact that I consider some prices of Argentinean fixed Income securities to be cheap.
Now lets go to a Bond I own. Banco Macro 2017.
What is Banco Macro? Banco Macro (NYSE: BMA), operations have become even more profitable during last 10 years. During Q3 net income grew by 31% Year over Year. As for today, BMA trades at 2013 x3.3 P/E and at a .75 price to book value. Generating a normalized 32% ROE and a normalized 4.1% ROA, BMA is one of the better managed and most stable banks in Argentina. The bank is controlled by the Brito and Carballo families and it has been consolidating the local banking industry for the past 20 years. Its market capitalization is $900 million and I am sure it can afford to pay its USD denominated debt although rating agencies seem to disagree with me (Moodys gave BMA 2017 a B3 rating).
The reason? The Bank’s operations are in a country not many people do trust right now.
Rank: Sr. Unsecured security.
Maturity: 2017. The bond fully matures on that date. Its a bullet bond.
Issuance: 150 M USD.
Clean Price: 80%
It pays semi annually and next payment is Feb 1st 2013.
Current Yield: 10.6%
GOOD news, You can buy it through Interactive Brokers. So this means that is suitable for any investor with more than 10,000 USD in his pockets.