Argentine Bonds Sink to 36 Cents as President-Elect Stays Mum

Investors are souring on how much they can recoup from a potential Argentine default as President-elect Alberto Fernandez procrastinates on plans to save his nation from financial ruin, Bloomberg News reported. Argentine dollar bonds due in 2028 now fetch as little as to 36 cents on the dollar -- a drop of about 20 cents since the immediate aftermath of the leftist’s surprise primary victory in August. A mountain of debt, staggeringly high inflation and little sign of who Fernandez will pick for his cabinet -- and which policies they will implement -- have bondholders begging for clarity. “It doesn’t inspire confidence for effective crisis management,” according to Siobhan Morden, who runs Amherst Pierpoint Securities’ Latin America fixed-income strategy from New York. “If there is no obvious growth model and no commitment for fiscal reform, then the burden may shift to bondholders for debt relief.” Read more

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