Products

Bonds

They are debt securities issued in the medium and long term by governments, multilateral lending agencies, municipalities and private companies for the purpose of raising funds from the market, to finance specific projects or finance public spending in the case of sovereign debt.

They are usually issued with an annual rate, fixed or variable, and interest payable every six months, forcing the debtor to pay the bondholder the nominal value at the maturity date or sometimes earlier depending on the established conditions, such as, if partial or total prepreciations are stated.

They are classified as liabilities, having priority of payment in relation to the holders of subordinated debt or preferred stock.
The titles of this type issued by private institutions in the local market are called negotiable liabilities.

Negotiable liabilities

The liabilities are securities in which, the undersigned, agree to pay a sum of money at a certain date, in established conditions. As in the case of treasury bonds, they are usually issued with an annual rate, fixed or variable, and interest payable every six months.

The issued liability is a mechanism used by a company when you need money resources of importance. The fundamental relationship that justifies its creation is a loan agreement. Lenders are people interested in making investments in money. The borrower is the creator of the document, who implements its obligation.

The peculiarity of this business is that it is a group loan. The issuer, in need of money, offers the public its liabilities up to an indicated number. Interested parties should provide fractional sums of the overall loan and, in exchange for the loan, they receive one or more certificates representing the amount borrowed. The securities are issued in series and of equal amounts. Each security is representative of a fraction of the group loan agreement.

 

Trusts

The trust is a contract or agreement under which one or more persons, also called trustor, conveys property, amounts of money or rights, present or future, of his property to another person (an individual or legal entity), so that it manages or invests assets for their own benefit or the benefit of a third party, called a trustee.

It should be noted that at the time of creation of the trust, neither party owns the property subject to the trust. The trust is, therefore, a contract by which a person allocate certain goods for a determined lawful purpose, giving the realization of this,  to a trust institution in all the enterprises.

The assets involved do not take any commercial risk of the trustor (which transfers the ownership of the property) nor the trustee (the owner of the trust property after the expiration of the contract term), since the assets of the trust which is subject can not be pursued by the creditors of any of them, nor affected by the bankruptcy of both or one of them.
 

 

Monetary Regulation Bills

The Central Bank of Uruguay (BCU) issues Monetary Regulation Bills (LRM) in order to regulate the structural liquidity of the financial system. To fulfill this purpose currently has two essential tools, the LRM in Uruguayan peso and LRM in indexed units. The latter offer a hedge against inflation.

The LRM in national currency are issued with maturity terms of about 30, 60, 90, 120, 180, 270, 360 and 720 days, while those denominated in indexed units (IU) are issued with maturities of 1 and 2 years.

For these last maturity terms, both in national currency and in UI, it gives the investor the option to integrate placements not only in nominal pesos but also in U.S. dollars. The conversion rate is the average rate of the prior bisiness day to the integration, set by the BCU. In all cases the services of depreciation and interest are paid in Uruguayan pesos.

Note that the LRM for up to 2 year term are zero coupon, and the current value is debited from the current account of the institutions at the time of integration, is given by the following formulas:

 

For values ​​in nominal pesos:
VA = VN
(1 + i) t/365

For values in indexed units:
VA = VN x 365
365 + (i x t)

Where:
VN represents the nominal value
VA represents the present value
t is the time period expressed in days
i is the annual interest rate expressed as a percentage
 

Stocks/ Shares

A stock or common stock is a security issued by a company which represents the value of one, of the equal fractions into which its capital is divided. The stocks generally give the holder, called stockholders or shareholders, political rights, such as voting at the meeting of stockholders of the entity, and economic, for example to participate in the profits of the company. Normally the shares are transferable without restriction, ie freely.
As an investment,it is in variable rent, since it has no fixed return established by contract, but that depends on the results of the company.

 

Preferred Shares

They also represent a portion of a company's capital, with the difference that they have a fixed dividend and no voting rights but they have priority in payment of dividends to common shareholders. They are less liquid than the common stock, but they have a more stable  price and have a predetermined redemption date at the time of issue.

 

ETFs

A ETFs (Exchange-Traded Funds) is a mutual fund that operates freely on the stock exchange, the same as shares. The aim they persue, is to replicate the evolution of both indexes, commodities or bonds, allowing a greater diversification of risk.