TZB25
📉 Dollar-linked instruments generally underperformed the recent dollar jump, as much of the move was already anticipated and priced in before the Cepo removal.
🚪 The “Puerta 12” effect was observed: devaluation occurred long before maturity, leading to selling pressure after the event as the bonds lost their primary appeal.
🤔 While some bonds like TZB25 or corporate ONs (Gemsa, Sami) now trade at potentially attractive implicit dollar rates (below the official rate), their appeal is diminished post-devaluation, and company-specific risks remain.
@ClaveBursatilTV:
“Tell me what they are asking about, Tincho. Tell me why the ONs of Generación Mediterránea didn’t go up with that dollar assault it had of 12% on Monday? Sami’s didn’t go up either, I’ll let you know that Sami’s didn’t go up either. It seems to me it has to do with the company risk… it has to do with the company risk for me. And MCMO went up? I don’t know, I don’t follow it. I don’t follow it, but it was much… it went up much less than the dollar… Before the announcement, dollar future closed at 1200 in April, right? And we are in April, and the dollar is at 1200. So I say, probably, I didn’t check, but probably the Dollar Link instruments that have the correct duration… because if you tell me a dollar link instrument that matures in 2 years, it won’t have sensitivity to the short-term devaluation, less so when it’s only 12%. But probably, just as the dollar future went up before the announcement, expecting the announcement, everything it had to go up, went up before. It didn’t go up with the announcement because the announcement was already expected. That’s why I say the dollar future had already gone up. We were in April with a dollar at 1080 pesos, and the dollar future was already trading at 1200 before the announcement. So I say, if a Dollar Link paper had to go up due to the dollar’s rise, it went up before, right? … Let’s go with this one [TZB25]. What a tour! Look at that, oh what a screw-up, huh? April 11th was Friday. On Friday it cost… look at that, 1275 pesos per dollar. It opened on Monday… ah, but it went to the moon! Look, 1280 pesos per dollar. And well, now it corrected, it’s trading below par. You’re paying 1165 here. Here we have… this graph is spectacular to explain to people something we’ve talked about so many times in abstract and it happened: the ‘Puerta 12’ effect in a dollar link asset when the devaluation happens much earlier than the bond’s maturity. We always explain how the ‘Puerta 12’ effect works. There’s the dollar link bond, and the devaluation, meaning the event it covers you from, happens too early before the bond’s maturity. So what happens? The event occurs, and after the event, which in this case was Monday, the Dollar Link asset becomes unattractive because there’s no more expectation of devaluation. So the only way you have to take the profit is by selling the asset; you can’t wait for maturity because it’s too far away, and the paper ceases to be attractive in the new scenario. So everyone rushes to sell as soon as it goes up, and we have what we see there: a rise due to the dollar’s rise, but then, as everyone wants to sell it, it goes down and gives back all the gain. The famous ‘Puerta 12’ effect, and here we have it for the photo. Beautiful. But with a shorter bond, that doesn’t happen because you don’t have to sell it; you simply let it mature, and that’s it. See? Does the TZB25 still exist, as you told me? Yes. When does it mature? Do you remember? Notice that the volatility was lower, meaning it opened higher and fell, but yes, but let’s say it still ended up higher than the previous day. That is, it still had a gain. Yes, it reached 1248 pesos per dollar because on top of all this, these are zero-coupon, they don’t pay coupons. It’s a replica of the official dollar. And we see that here it closed at 1171 pesos… The official dollar is… how much is the wholesale? 1200. Well yes, you have a small discount. I don’t know when this one matures; it must mature mid-year. Yes, it looks like it. So we have to see if it beats the rate, right? Yes, we have to see if it beats the rate. What needs to be done now is to arbitrage the bond with the official dollar price, and that’s it. See? But well, whoever had this from before to cover themselves from the regime change can keep it and let it mature. Anyway, I tell you, covering yourself from a 12% dollar rise… really, a 12% rise… it’s not like the previous devaluation was from 380 to 800, ‘I cover myself from that,’ okay. Macri’s, when the cepo was lifted, went from 9 to 15, ‘well okay, I covered myself from that.’ But here, covering yourself from a 12% rise, the truth is it’s quite a loser compared to the rise…”
Watch the exact part of the video where @ClaveBursatilTV talks about Argentina Treasury Bond (Dollar-Linked) 2025 here:
Watch the video on YouTube
Read more articles analyzing Argentina Treasury Bond (Dollar-Linked) 2025 (TZB25) at the following link. TZB25 stock.
