Negotiable Obligations debt securities issued through the Stock Market. ONs are an excellent financing alternative for private entities and an attractive instrument for investors. The capital of the obligations is generally returned in annual or semi-annual installments called amortizations, and generates an interest that can be of fixed or variable rate, called rent payment. Unlike an action, who invests in bonds or obligations buys part of the debt of the company or issuing entity; instead of becoming a partner, he becomes a creditor.
Main advantages for the Inverse
- Certainty of the collection of the rent at maturity with a predetermined payment schedule.
- Increased Investment Security, by having a risk rating by third parties, who measure the issuer’s ability to honor their debt commitments.
- Guarantee: Negotiable obligations may be backed by a guarantee, which may be real, fiduciary, of a mutual guarantee company or another, which adds greater security to the investment in this instrument.