River is financed on the capital market

Club Atlético River Plate has joined the placement of its first Financial Trust with UVA modification for 30 months. Its rate – and within the comparable universe – is attractive at 9% per annum on the indexed capital. And among the most important characteristics, the quarterly payment of capital and interest services stands out, which has its own duration just under 17 months.

Qualification is another fact that needs to be emphasized. FixScr gave it an A+sf grade, highlighting good debt service coverage indicators, given the flows from its main asset, which are Naming Credits with Dorinka and Somos River program credits.

Even as a secondary asset, River will transfer the rights to sell stands. Fix also points to the very good economic and financial situation of the club. Conditions that make the issue an investment opportunity for fans and non-fans alike.

Specifically, River Plate will aim for around 20,000 million dollars. The placement is already in the process of being circulated (as the “sale” period is usually called in the market) and the bidding will be next Thursday, October 3rd.

Regarding the allocation of funds from this issue, the club stressed that it is to continue with its investment plan for 2024 and 2025. There is no doubt that River, which has more than 350,000 members and believes it has around 20 million fans . in the country and abroad aims for fans to support their club, which is in the semifinals of the Copa Libertadores today, not only by cheering on the field, but also with their financial support to complete the infrastructure works of some of the biggest clubs in Argentina.

But let’s double-click and look at some market numbers that confirm why River and other companies are taking this approach to finance themselves.

In fact, so far this year (through August), total capital market funding has hovered around $14.2 trillion, implying an increase of 17% compared to the same period last year. Occasional acceleration in recent months when year-on-year comparisons are made.

If we look at it by instrument, 47% is explained by ON issuance, followed by bills at 32%. Specifically, in the first of them, about 153 issues stand out with a nominal annual rate of 44.4%, according to the CNV report.

It is even expected that if the economy begins to reactivate, many more insurers will begin to approach the market, driven by the advantages they will gain (including, more than once, getting more competitive rates than traditional channels and longer terms).

Also to help deepen the market – especially in the small and medium-sized business segment – ​​the National Securities Commission has made progress in relaxing some regulations.

Without going any further, in the past months it modified the special regime for the establishment of financial trusts intended for the financing of small and medium-sized companies and temporarily expanded the range of assets eligible for collective investment funds of small and medium-sized enterprises. The aim is to continue expanding the range of entities that have access to differentiated financing, such as the regime for small and medium-sized companies on the capital market.

The last point, which is also starting to show in the numbers. If the numbers of small and medium-sized enterprises, from those already mentioned, are analyzed, for example, it reflects for the first 8 months of 2024 a real increase of 32% compared to 2023. Specifically, in August it was 829,457 million USD (637 million USD ), 48% capital market funding for the month and an increase of 14% compared to August 2023. Here the Bills explain a large part of the whole.

The author is Corporate Director PPI (Personal Investment Portfolio)