Hello again everyone,
The last October 23, 2010, made an entry where I wanted to highlight the importance for any investment must have what is called the triangle investor, ie profitability, risk and liquidity of the same . In the tenth paragraph of the entry contained the following:
"When you read in the press, a well known brand toy , will offer 9.75% for obligations of the company three years or, when one sees on television that a group known food, offers 10% return on an issue of promissory notes to two years, must take into account the risk-reward ratio is very clear. can earn much more because you assume more risk. It's that simple. "
Well, I did not want to be prudent refer clearly to what I was referring to two companies , was not to stigmatize same merit. Today, when in fact seem to confirm my suspicion last, I can clarify that when I referred to a "known food processing company, was referring to New Rumasa , and when referred to a" well-known brand toy ", was referring to Zinkia , publicly traded company that markets the doll called Pocoyo.
Unfortunately for their interests covered a percentage Zinkia ridicule of that "wonderful" issue bonds to 9.75% and it seems, from what I read recently in the financial press, which has serious problems in obtaining bank loans , being necessary to the grant is offered as guarantees the company's own shares. Watch out if someone has thought of buying shares of this company is far less in the better financial times.
In New Rumasa and their "wonderful" notes, try to give my humble and constructive feedback.
The offering PERFORMANCE subsequent bond issues that are advertised so much joy in various media, were from 8% to 12% . In principle, an extremely attractive return and, in my view, extremely little explanation.
Any fairly prudent and wise investor should be wary of a society that makes such returns when the official rate of money are about 1% in the euro zone, where companies in the financial soundness of Banco Santander or Telefonica, no need to pay more than 4% for its subordinated debt issues in the case of Banco Santander and promissory notes, in the case of Telefónica. It is still very striking, and very suspect, New Rumasa had to pay three times of that interest to be funded.
The higher return is only offered as an explanation, the increased risk or lower solvency of the issuer of the notes. When not enough credit is given, the only way to get money is to offer investors higher yields to offset the higher investment risk assumed.
The higher return is only offered as an explanation, the increased risk or lower solvency of the issuer of the notes. When not enough credit is given, the only way to get money is to offer investors higher yields to offset the higher investment risk assumed.
just want to remember that when 10-year Greek bonds, or their Irish counterparts, exceeded profitability of 7.5%, these countries had to intervene because it was considered that this cost of finance was unaffordable to those States . It hardly seems reasonable to think that if for any two sovereign States of financing cost of 7.5% was unaffordable for a company like New Rumasa, feasible, credible and financially viable financing assume a cost of up to 12 %.
With all due respect and no offense to anyone the profitability of up to 12% is typical of a junk bond rather than an investment that ensures a reasonable return , guarantees can recover invested capital, which incidentally, is what any investor should aim average, between myself included.
If we add the illiquidity ABSOLUTE of New Rumasa notes, anyone with a bit of financial literacy means that you one euro buying these notes.
If we add the illiquidity ABSOLUTE of New Rumasa notes, anyone with a bit of financial literacy means that you one euro buying these notes.
The failure to sell the notes in the secondary market because they were not admitted to the official one, means that investors now are tied hand and foot, caught in an investment that can not out, which can not discard.
Nobody should put their money in a investment that puts serious obstacles to get out of it, since it is too costly to assume that very few people can take.
Finally, as to RISK investment, whether the current pre-contest phase, ending in bankruptcy proceedings, the priority for the recovery of various loans, is not more favorable to the interests of the holders of the notes.
have priority to collect the amounts invested those who had attended a issuance of notes to count with a "security interest" (called, special privileged creditors) that would ensure the return on investment, something that does occurred in the third issue of New Rumasa notes, offering a yield of 8%.
In the disclosure of the issue, made explicit references to the existence of a "collateral notary", consisting of stocks sherry brandy brand "Conde de Jerez", worth 1,200 million euros.
I doubt very much that buyers of such notes actually knew that the security of their money was basically brandy barrels content oak. I can hardly believe that anyone can put their money in a guaranteed investment for brandy in oak barrels. Just knowing that fact, would be understandable if the purchase of such notes.
The big problem with these stocks, apart from whether or not real, the weight given to them is that they are very difficult to control, so that if for any reason disappear, investors will have collection privilege to be unsecured creditors, clearly hindering his chances of recovery.
This character of unsecured creditors, is that investors have unsecured notes, which means be charged after you have made general priority creditors (see Finance or Social Security) and special preferential creditors, such as those mentioned above.
In late 2010 and early 2011, and Dhul Clesa announced the issuance of capital increases to those shares could go subscribing minimum of 50,000 euros, receiving an annual interest of 10%. Customers went to these capital and today have a shareholder, are those in the worst position possible, ie shall be last in charge.
I fear that all these "inconveniences" little or nothing was explained to those who in good faith and possibly without all the necessary information, signed promissory notes New Rumasa. Again, financial ignorance will mean that around about 5,000 investors lost much of their money in an investment anything liquid, with significant risks and that no one should have gone.
Regards, and all the luck in the world for those involved in the issue. José Antonio
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