Argentina Bond Prices Fall, Risk Spreads Widen After Restructuring Warning

Argentine bonds took a beating on Thursday after the economy minister warned that a “deep debt restructuring” was on the way, and promised to take a tough stance with creditors while refusing to impose fiscal austerity on the shrinking economy, Reuters reported. Over the counter bond prices RPLATC fell an average 2% while Argentina’s risk spread 11EMJ shot out 118 basis points to 2,068 over safe-haven U.S. Treasury paper. Late on Wednesday, Economy Minister Martin Guzman told Congress that while pushing out bond maturities he would not try to cut the primary fiscal deficit this year, saying that austerity was never a good idea for an economy in recession. He warned that the restructuring would likely be “frustrating” for bondholders. Read more