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By: Gabrielle Coppola
Argentine businessman Eduardo Elsztain’s bid to restore confidence in his real estate investment company is winning over bondholders. Stock investors are still feeling burned.
IRSA Commercial Properties’ bonds have rallied since the $360 million in notes were issued and its parent company, IRSA Inversiones & Representaciones SA, simultaneously bought back some of its own debt. The deal -- essentially a transfer of liabilities from the controlling company to the subsidiary -- reassured creditors by bolstering speculation they’ll be shielded from the financial troubles of another IRSA-controlled group, the Israeli conglomerate IDB Development Corp., according to brokerage AdCap Securities.
“It’s not 100 percent clear that IRSA Commercial Properties is completely safe” from claims related to IDB, said AdCap analyst Federico Ramos Taboada, “but there’s a new layer they’d have to go through.”
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