Argentina Sifts Through ‘Fantasy Land’ Bond Proposals

Argentina’s creditors holding out hope that they can avoid losses on the country’s bonds are “living in fantasy land”, one big investor said, reflecting tensions over the government’s reorganisation of its massive debt pile, the Financial Times reported. Alberto Fernández, who is expected to win presidential elections later this month, has assured markets that losses on bonds would not be necessary as part of the debt’s “voluntary reprofiling”, as long as creditors give Argentina’s economy time to start growing again. But an economist close to Mr Fernández said: “From knowing politicians, they always like to delay the pain.” That could mean issuing new bonds to free up the government from making interest payments over the next two to three years. An “even more aggressive” approach would be “Ukraine-style” losses — a so-called haircut — of about 20 per cent, the economist said. Read more